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Shared networks and market power in two-sided markets

Author

Listed:
  • Juan Manuel Sánchez-Cartas

    (Universidad Politécnica de Madrid)

  • Gonzalo Leon

    (Universidad Politécnica de Madrid)

Abstract

We develop a two-sided market model with N platforms in which we compare the cases with and without shared networks. We find that, in markets with shared networks, platforms have a higher market power than in the case without shared networks. We analyze the conditions under which this behavior is profitable. Lastly, we compare our results with other works in literature, and we show that previous works are particular cases of our framework.

Suggested Citation

  • Juan Manuel Sánchez-Cartas & Gonzalo Leon, 2017. "Shared networks and market power in two-sided markets," Economics Bulletin, AccessEcon, vol. 37(3), pages 2173-2180.
    • Handle: RePEc:ebl:ecbull:eb-17-00126
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I3-P196.pdf
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    References listed on IDEAS

    as
    1. Salim, Claudia, 2009. "Platform Standards, Collusion and Quality Incentives," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 257, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
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    Cited by:

    1. Juan Manuel Sanchez‐Cartas & Gonzalo León, 2021. "Multisided Platforms And Markets: A Survey Of The Theoretical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(2), pages 452-487, April.

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    More about this item

    Keywords

    Two-sided markets; Shared Networks; Market power; Lerner Index;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D2 - Microeconomics - - Production and Organizations

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