Platform Competition in Two-sided Markets and Welfare Implications

• 영문명: Platform Competition in Two-sided Markets and Welfare Implications
• 발행기관: 한국계량경제학회
• 저자명: 조원기(Wonki Jo Cho)
• 간행물 정보: 『JOURNAL OF ECONOMIC THEORY AND ECONOMETRICS』Vol.34 No.4, 50~85쪽, 전체 36쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2023.12.31

영문 초록

We study the behavior of competing platforms in a two-sided market. A user derives two types of utility from joining a platform: the intrinsic membership benefit, which varies across users, and the network benefit, which is determined by the number (measure) of users from the other side joining the same platform. When multiple platforms compete in price to attract users, in each symmetric equilibrium, each platform earns a zero profit. We also construct the unique equilibrium in the case of platform monopoly. Our comparison of welfare levels attained in oligopoly and monopoly shows that when there are at least two platforms in the market, social welfare decreases as the number of platforms increases; and that social welfare is maximized when two platforms or a single platform operates, depending on the magnitudes of network externality and marginal cost.

목차

1. INTRODUCTION

2. THE MODEL

3. EQUILIBRIUM ANALYSIS

4. THE CASE OF PLATFORM MONOPOLY

5. WELFARE COMPARISON

6. CONCLUDING REMARKS

REFERENCES

키워드

Two-sided market platform competition network externality social welfare