The Competitive Effects of Vertical Integration in Platform Markets

Jerome Pouyet and Trégouët, Thomas
Authors registered in the RePEc Author Service: Thomas Tregouet

No 17681, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze vertical integration between platforms providing operating systems to manufacturers of devices when there are indirect network effects between buyers of devices and developers of applications. Vertical integration creates market power over developers, and over non-integrated manufacturers but only under certain circumstances. That market power enables to coordinate pricing decisions across both sides of the market, which leads to a better internalization of network effects. Vertical integration does not systematically lead to foreclosure and can benefit all parties, even in the absence of efficiency gains. Its competitive impact depends on the strength and the structure of indirect network effects.

Keywords: Vertical integration; Platform markets; Network effects; Foreclosure (search for similar items in EconPapers)
JEL-codes: D43 L10 L40 (search for similar items in EconPapers)
Date: 2022-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17681 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The Competitive Effects of Vertical Integration in Platform Markets (2023)
Working Paper: The Competitive Effects of Vertical Integration in Platform Markets (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17681

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17681

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().