Two-Sided Markets with Negative Externalities

Reisinger, Markus (Dezember 2004): Two-Sided Markets with Negative Externalities. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2004-27

Abstract

This paper analyses a two-sided market in which two platforms compete against each other. One side, the advertisers, exerts a negative externality on the ther side, the users. It is shown that if platforms can charge advertisers only, a higher degree of competition for users can lead to higher profits because competition on the advertisers' side is reduced. If platforms can charge users as well, profits might increase or decrease, the latter because of increased competition through the additional instrument of the user fee. Nevertheless the equilibrium with user fee is more efficient.

• Dokumententyp: Paper
• Keywords: Negative Externalities ; Price Competition ; Two-Sided Markets
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Munich Discussion Papers in Economics ; Volkswirtschaft > Munich Discussion Papers in Economics > Industrieökonomik ; Volkswirtschaft > Lehrstühle > Seminar für Dynamische Modellierung (aufgelöst)
• Themengebiete: 300 Sozialwissenschaften > 300 Sozialwissenschaft, Soziologie ; 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: D43, D62, L13
• Sprache: Englisch