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Effects of platforms' entry into own marketplace: Evidence from the mobile application market

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  • Jamison, Mark A.
  • Tęcza, Jakub
  • Wang, Peter

Abstract

We study the competition effects of platforms entering their own marketplaces in the context of mobile applications. Using a rich panel dataset of monthly observed applications on the most prominent mobile ecosystems, Apple and Android, we seek to understand how the launch of a new application by the platform owner affects consumers and third-party developers (developers). We find evidence that Apple's efforts have positive effects on developers and encourage innovation. But on the Android platform, introduction of a Google app decreases the number of users for developers' apps. This is likely a substitution effect rather than suppression as developers do not decrease their expansion on the Android platform. In general, we find evidence of platform vertical integration having positive impacts for consumers and developers, and only quite weak evidence of suppression.

Suggested Citation

  • Jamison, Mark A. & Tęcza, Jakub & Wang, Peter, 2023. "Effects of platforms' entry into own marketplace: Evidence from the mobile application market," 32nd European Regional ITS Conference, Madrid 2023: Realising the digital decade in the European Union – Easier said than done? 277975, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse23:277975
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    References listed on IDEAS

    as
    1. Andrei Hagiu & Tat‐How Teh & Julian Wright, 2022. "Should platforms be allowed to sell on their own marketplaces?," RAND Journal of Economics, RAND Corporation, vol. 53(2), pages 297-327, June.
    2. Wen Wen & Feng Zhu, 2019. "Threat of platform‐owner entry and complementor responses: Evidence from the mobile app market," Strategic Management Journal, Wiley Blackwell, vol. 40(9), pages 1336-1367, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Platforms; competition; vertical integration; regulation; self-preferencing;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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