The monopoly benchmark on two-sided markets

Christopher Mueller and Enrico Boehme
Authors registered in the RePEc Author Service: Christopher Müller and Enrico Böhme

MPRA Paper from University Library of Munich, Germany

Abstract: The literature on the effects of market concentration in platform industries or two-sided markets often compares the competitive outcome against a benchmark. This benchmark is either the “joint management” solution in which one decision maker runs all platforms or a “pure” monopoly with just one platform. Literature has not generally discussed, which benchmark is the appropriate one. We show that the appropriate benchmark, i.e. how many platforms the monopolist will operate, depends on whether agents multi- or singlehome, whether the externalities are positive or negative, and in some cases on the properties of the demand functions. Different situations require different benchmarks. Our results also help to anticipate the effects of proposed platform mergers, where the assessment might crucially depend on the number of platforms after a merger.

Keywords: two-sided markets; market concentration; monopoly (search for similar items in EconPapers)
JEL-codes: D42 D43 K20 L12 L13 L51 (search for similar items in EconPapers)
Date: 2011-11-01
New Economics Papers: this item is included in nep-com, nep-ind, nep-law and nep-net
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Related works:
Journal Article: The Monopoly Benchmark on Two-Sided Markets (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:34987

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