DP15204 The tension between market shares and profit under platform competition
|Author(s):||Paul Belleflamme, Martin Peitz, Eric Toulemonde|
|Publication Date:||August 2020|
|Keyword(s):||Antitrust, market power, Market Share, network effects, oligopoly, Two-sided platforms|
|JEL(s):||D43, L13, L86|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=15204|
We introduce asymmetries across platforms in the linear model of competing two-sided platforms with singlehoming on both sides and fully characterize the price equilibrium. We identify market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform. This platform enjoys a competitive advantage on one or both sides. Our finding raises further doubts on using market shares as a measure of market power in platform markets.