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An Empirical Model of Mobile App Competition

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  • Kawaguchi, Kohei
  • Kuroda, Toshifumi
  • Sato, Susumu

Abstract

This paper proposes an empirical model of mobile app competition, in which consumers decide downloads and usage time, and apps compete in price and advertising intensity. We estimate the model using data from Google Play in Japan from 2015 to 2017. We demonstrate merger simulation and the analysis of the vertical relation with Google Play. We find that a reduction of the fee imposed by Google Play can increase the price for game apps by inducing the shift of revenue source from advertising to downloads, highlighting the importance of considering two-sidedness and mixed business models.

Suggested Citation

  • Kawaguchi, Kohei & Kuroda, Toshifumi & Sato, Susumu, 2022. "An Empirical Model of Mobile App Competition," SocArXiv 2bdk4, Center for Open Science.
    • Handle: RePEc:osf:socarx:2bdk4
    DOI: 10.31219/osf.io/2bdk4
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    References listed on IDEAS

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    1. Lapo Filistrucchi & Tobias J. Klein & Thomas O. Michielsen, 2012. "Assessing Unilateral Merger Effects In A Two-Sided Market: An Application To The Dutch Daily Newspaper Market," Journal of Competition Law and Economics, Oxford University Press, vol. 8(2), pages 297-329.
    2. Farrell Joseph & Shapiro Carl, 2010. "Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-41, March.
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