Exclusionary Pricing in a Two-Sided Market

Massimo Motta () and Helder Vasconcelos

No 9164, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper we provide a new way of modelling two-sided markets, and we then use this model to study anti-competitive conduct in an asymmetric two-sided market which captures the main features of some recent antitrust cases. We show that below-cost pricing on one market side can allow an incumbent firm to exclude a more efficient rival which does not have a customer base yet. This exclusionary behaviour is the more likely to occur the more mature the market and the stronger the established customer base of the incumbent.

Keywords: Demand externalities; Predation; Two-sided markets (search for similar items in EconPapers)
JEL-codes: L11 L13 L41 (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-com, nep-mic and nep-net
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Citations: View citations in EconPapers (4)

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