Logo Logo
Hilfe
Hilfe
Switch Language to English

Schmidtke, Richard (Juni 2006): Two-Sided Markets with Pecuniary and Participation Externalities. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2006-19 [PDF, 415kB]

[thumbnail of Two_Sided_Munich_paper.pdf]
Vorschau
Download (415kB)

Abstract

The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising and offer consumers a service free of charge (such as a TV program) that is financed through advertising. We show that advertising can exhibit the properties of a strategic substitute or complement. Surprisingly, there exist cases in which platforms benefit from market entry. Moreover, we show that from a welfare point of view perfect competition is not always desirable.

Dokument bearbeiten Dokument bearbeiten