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Hotelling’s Duopoly in a Two-Sided Platform Market on the Plane

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  • Vladimir Mazalov

    (Institute of Applied Mathematical Research, Karelian Research Center of the Russian Academy of Sciences, 11, Pushkinskaya str., 185910 Petrozavodsk, Russia
    School of Mathematics and Statistics, Qingdao University, Qingdao 266071, China
    Institute of Applied Mathematics of Shandong, Qingdao 266071, China
    The work was supported by the Shandong Province “Double-Hundred Talent Plan” (No. WST2017009).)

  • Elena Konovalchikova

    (Laboratory of Digital Technologies in Regional Development, Karelian Research Center of the Russian Academy of Sciences, 11, Pushkinskaya str., 185910 Petrozavodsk, Russia
    These authors contributed equally to this work.)

Abstract

Equilibrium in a two-sided market represented by network platforms on the plane and heterogeneous agents is investigated. The advocated approach is based on the duopoly model which implies a continuum of agents of limited size on each side of the market and examines the agents’ heterogeneous utility with the Hotelling specification. The exact values were found for the equilibrium in the case of duopoly in a two-sided market with two platforms on the plane. The dependence of the platforms’ benefits on network externalities was investigated. The problem of the optimal location of platforms in the market was considered.

Suggested Citation

  • Vladimir Mazalov & Elena Konovalchikova, 2020. "Hotelling’s Duopoly in a Two-Sided Platform Market on the Plane," Mathematics, MDPI, vol. 8(6), pages 1-16, May.
  • Handle: RePEc:gam:jmathe:v:8:y:2020:i:6:p:865-:d:363502
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    References listed on IDEAS

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