Sequential pricing on multisided platforms

Philippe Bontems (), Stephen F. Hamilton () and Jason Lepore
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Philippe Bontems: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Stephen F. Hamilton: Orfalea College of Business - CAL POLY - California Polytechnic State University [San Luis Obispo]
Jason Lepore: Orfalea College of Business - CAL POLY - California Polytechnic State University [San Luis Obispo]

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Abstract: Multisided platforms have emerged as an increasingly important market structure with the rise of the digital economy. In this paper, we consider sequential price setting behavior by platforms and demonstrate sequential pricing outcomes Pareto dominate simultaneous pricing outcomes in terms of firm and industry profits. We compare policy implications and find prices are more balanced across the platform and average prices are higher under sequential pricing than under simultaneous pricing. We also demonstrate that pricing power can be considered independently on each side of the market under multihoming behavior.

Keywords: Network Effects; Two-Sided Markets; Platform Competition (search for similar items in EconPapers)
Date: 2025-07
Note: View the original document on HAL open archive server: https://hal.science/hal-05284376v1
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