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Collusion between two-sided platforms

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  • Lefouili, Yassine
  • Pinho, Joana

Abstract

We study the price and welfare effects of collusion between two-sided platforms and show that they depend on whether collusion occurs on both sides or a single side of the market, and whether users single-home or multi-home. Our most striking result is that one-sided collusion leads to lower (resp. higher) prices on the collusive (resp. competitive) side if the cross-group externalities exerted on the collusive side are positive and sufficiently strong. One-sided collusion may, therefore, benefit the users on the collusive side and harm the users on the competitive side. Our findings have implications regarding cartel detection and damages actions.

Suggested Citation

  • Lefouili, Yassine & Pinho, Joana, 2020. "Collusion between two-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:indorg:v:72:y:2020:i:c:s0167718720300795
    DOI: 10.1016/j.ijindorg.2020.102656
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    Cited by:

    1. Jullien, Bruno & Sand-Zantman, Wilfried, 2021. "The Economics of Platforms: A Theory Guide for Competition Policy," Information Economics and Policy, Elsevier, vol. 54(C).
    2. Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
    3. Christian Bach & Robert Edwards & Christian Jaag, 2023. "Postal Platform Pricing with Limited Consumer Attention," Working Papers 202318, University of Liverpool, Department of Economics.
    4. Tremblay, Mark J. & Adachi, Takanori & Sato, Susumu, 2023. "Cournot platform competition with mixed-homing," International Journal of Industrial Organization, Elsevier, vol. 91(C).
    5. Holler Marit, 2022. "Welfare Effects of Platforms’ Exclusivity Clauses," Review of Network Economics, De Gruyter, vol. 21(3), pages 143-170, October.
    6. Jiancai Pi & Pengqing Zhang, 2024. "Platform competition with common ownership," Journal of Economics, Springer, vol. 142(3), pages 247-265, August.
    7. Yan, Xiaoyu & Liu, Weihua & Tang, Ou & Hou, Jiahe, 2024. "When will an overconfident entrant in the two-sided market do more good than harm?," International Journal of Production Economics, Elsevier, vol. 267(C).
    8. 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

    Collusion; Two-sided markets; Cross-group externalities;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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