Citation

Discussion Paper Details

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Title: Exclusionary Pricing in a Two-Sided Market

Author(s): Massimo Motta and Helder Vasconcelos

Publication Date: October 2012

Keyword(s): Demand externalities, Predation and Two-sided markets

Programme Area(s): Industrial Organization

Abstract: In this paper we provide a new way of modelling two-sided markets, and we then use this model to study anti-competitive conduct in an asymmetric two-sided market which captures the main features of some recent antitrust cases. We show that below-cost pricing on one market side can allow an incumbent firm to exclude a more efficient rival which does not have a customer base yet. This exclusionary behaviour is the more likely to occur the more mature the market and the stronger the established customer base of the incumbent.

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Bibliographic Reference

Motta, M and Vasconcelos, H. 2012. 'Exclusionary Pricing in a Two-Sided Market'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9164