
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.
Item Type: | Paper |
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Keywords: | Negative Externalities ; Price Competition ; Two-Sided Markets |
Faculties: | Economics Economics > Munich Discussion Papers in Economics Economics > Munich Discussion Papers in Economics > Industrial Organization Economics > Chairs > Chair of Dynamic Economic Theory (closed) |
Subjects: | 300 Social sciences > 300 Social sciences, sociology and anthropology 300 Social sciences > 330 Economics |
JEL Classification: | D43, D62, L13 |
URN: | urn:nbn:de:bvb:19-epub-478-5 |
Language: | English |
Item ID: | 478 |
Date Deposited: | 13. Apr 2005 |
Last Modified: | 08. Nov 2020, 11:10 |