3,744 research outputs found
Platform Competition as Network Contestability
Recent research in industrial organisation has investigated the essential
place that middlemen have in the networks that make up our global economy. In
this paper we attempt to understand how such middlemen compete with each other
through a game theoretic analysis using novel techniques from decision-making
under ambiguity. We model a purposely abstract and reduced model of one
middleman who pro- vides a two-sided platform, mediating surplus-creating
interactions between two users. The middleman evaluates uncertain outcomes
under positional ambiguity, taking into account the possibility of the
emergence of an alternative middleman offering intermediary services to the two
users. Surprisingly, we find many situations in which the middleman will
purposely extract maximal gains from her position. Only if there is relatively
low probability of devastating loss of business under competition, the
middleman will adopt a more competitive attitude and extract less from her
position.Comment: 23 pages, 3 figure
Platform Competition with Endogenous Multihoming
A model of two-sided market (for credit cards) is introduced and discussed. In this model, agents can join none, one, or more than one platform (multihoming), depending on access prices and the choices made by agents on the opposite market side. Although emerging multihoming patterns are, clearly, one aspect of equilibrium in a two-sided market, this issue has not yet been thoroughly addressed in the literature. This paper provides a general theoretical framework, in which homing partitions are conceived as one aspect of market equilibrium, rather than being set ex-ante, through ad-hoc assumptions. The emergence of a specific equilibrium partition is a consequence of: (1) the structure of costs and benefits, (2) the degree and type of heterogeneity among agents, (3) the intensity of platform competition.Two-sided markets, Network externalities, Standards, Platforms, Multihoming
Platform Competition and Broadband Uptake: Theory and Empirical Evidence from the European Union
Broadband access provides users with high speed, always-on connectivity to the Internet. Due to its superiority, broadband is seen as the way for consumers and firms to exploit the great potentials of new applications. This has generated a policy debate on how to stimulate adoption of broadband technology. One of the most disputed issues is about competition policies: these may be intended to promote competition in the Digital Subscriber Line (DSL) segment of the market (intra- platform competition), or to stimulate entry into the market for alternative platforms such as cable access or fiber optics (inter- platform competition). Using a model of oligopoly competition between differentiated products, our paper explicitly studies the effect of inter and intra platform competition on the diffusion of broadband access. The implications of the model are then tested using data from 14 European countries. The econometric evidence confirms the results of the theoretical model and indicates that while inter-platform competition drives broadband adoption, competition in the market for DSL services does not play a significant role. The results also confirm that lower unbundling prices stimulate broadband uptake.Broadband, inter-platform and intra-platform competition, local loop unbundling
Platform Competition and Broadband Uptake: Theory and Empirical Evidence from the European Union
Broadband access provides users with high speed, always-on connectivity to the Internet. Due to its superiority, broadband is seen as the way for consumers and firms to exploit the great potentials of new applications. This has generated a policy debate on how to stimulate adoption of broadband technology. One of the most disputed issues is about competition policies: these may be intended to promote competition in the Digital Subscriber Line (DSL) segment of the market (intra- platform competition), or to stimulate entry into the market for alternative platforms such as cable access or fiber optics (inter- platform competition). Using a model of oligopoly competition between differentiated products, our paper explicitly studies the effect of inter and intra platform competition on the diffusion of broadband access. The implications of the model are then tested using data from 14 European countries. The econometric evidence confirms the results of the theoretical model and indicates that while inter-platform competition drives broadband adoption, competition in the market for DSL services does not play a significant role. The results also confirm that lower unbundling prices stimulate broadband uptake.Broadband, inter-platform and intra-platform competition,local loop unbundling
Platform Competition with “Must-Have” Components
In platform-component systems with indirect network effects, some components are so popular with consumers that they have strong bargaining positions and can be regarded as “must-have” from the point of view of the platform. For example, ESPN is a must-have component of cable TV platforms. This paper presents a theoretical model to assess how platform market structures affect the likelihood of exclusive versus non-exclusive contracts between platforms and components. The model evaluates the combined impacts of (i) the popularity of the component, (ii) the platform market share difference and (iii) platform technological compatibility on the platform-component contractual arrangements. It shows that a component provider is more likely to sign exclusive access contracts with a single platform if its popularity is high, the platform market share difference is large, and platform compatibility is low.network effects, bargaining, platforms
Platform Competition in Pay-TV Market
In this paper, we undertake an empirical analysis of the current Japanese pay-TV market, where cable TV carriers and CS digital satellite carriers are the main players. After examining the factors for subscribing to pay-TV and the competitive situation in the market, we have the following findings; (1) Cable TV carriers promote high value-added service provision, such as bundling internet access, and these activities result in competitive superiority over CS carriers. (2) Cable TV carriers receiving bigger investment from local governments tend to gain higher rates of subscription, although they provide smaller numbers of channels with a low charge. (3) The number of terrestrial broadcasting channels which are transmitted via pay-TV carriers can have a large impact on competitive advantage when getting subscribers in the pay-TV market.Platform Competition, Cable Television, Communication Satellite, Pay-TV, subscriber penetration, high-value added service
The impact of inter-platform competition on the economic viability of municipal fiber networks
Local authorities investing in fiber broadband networks must meet the market investor principle. We apply a game theoretic approach to model the impact of inter-platform competition on the viability of the fiber business case
Zero Pricing Platform Competition
This article studies competition between different types of ad-funded platforms
attracting consumers with free services. Consumers often find advertisements a
nuisance on such platforms. We study how under a competitive setting platforms
balance the tension between attracting consumers and rent extraction from the advertising
side. We propose a flexible yet simple model that studies competition
between standard platforms and social media platforms (with same-side network
effects). We find that an increase in either positive same-side network effects or
an increase in consumer disutility from advertisements leads to a reduction in the
number of ads on that platform. When competing platforms merge, consumer side
network effects do not impact prices and the number of ads is higher. In a setting
where consumers present a negative (congestion) externality on each other, competition
fails to protect consumer welfare and behaves erratically. Finally, we present
a few extensions and discuss some policy implications
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