Platform Competition with Multihoming on Both Sides: Subsidize or Not?

Bakos, Yannis; Hałaburda, Hanna

doi:10.1287/mnsc.2020.3636

Cited by 131 publications

(52 citation statements)

References 15 publications

(8 reference statements)

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“…As discussed in Anderson and Jullien (2015), the theoretical literature has started filling this gap, e.g. Ambrus, Calvano, and Reisinger (2016), Anderson, Foros, and Kind (2018), Athey, Calvano, and Gans (2018), Jeitschko and Tremblay (2020), and Bakos and Halaburda (2020).…”

Section: Multi-homing In Two-sided Marketsmentioning

confidence: 99%

Estimating Demand with Multi-Homing in Two-Sided Markets

2021

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We empirically investigate the relevance of multi-homing in two-sided markets. First, we build a micro-founded structural econometric model that encompasses demand for differentiated products and allows for multi-homing on both sides of the market. We then use an original dataset on the Italian daily newspaper market that includes information on double-homing by readers to estimate readers' and advertisers' demand. The results show that an econometric model that does not allow for multihoming is likely to produce biased estimates of demand on both sides of the market. In particular, on the reader side, accounting for multi-homing helps to recognize complementarity between products; on the advertising side, it allows to measure to what extent advertising demand depends on the shares of exclusive and overlapping readers.

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Section: Multi-homing In Two-sided Marketsmentioning

confidence: 99%

Estimating Demand with Multi-Homing in Two-Sided Markets

2021

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“…The second contribution of our paper is that we discuss pricing strategy when the platform adopts the simultaneous role of agency and seller in the market. The non-exclusivity of products impacts platform strategy in a competitive market [5]. Li and Zhu [16] show a seesaw effect: the reduced third-party sellers' multihoming (i.e., the increased exclusivity of third-party products) leads to increased consumers' multihoming (i.e., consumers' higher transition probability).…”

Section: Literature and Contributionsmentioning

confidence: 99%

Exclusivity decision of platforms’ first-party products in a competitive market

Gao

2021

Inf Technol Manag

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Product exclusivity is a well-known strategy adopted by agencies to attract buyers. Although some platform firms develop first-party products to improve competitiveness, we show that they do not necessarily benefit from the exclusivity of these products in a competitive market. Platforms may sell their first-party products on their competitive platforms, which we call the non-exclusive strategy. The impact of the non-exclusive strategy on firms' profits is the result of an interaction between a competition effect and a demand effect. The competition effect is that the non-exclusive strategy reduces the differentiation between firms, and the investment strategy on the first-party product has no impact on the price competition between firms. The competition effect causes firms to intensify price competition and decrease the investment for their first-party product. The demand effect is that, in the presence of the non-exclusive strategy, the firm can obtain a sale profit from the first-party products in the competitive platform. The demand effect causes firms to diminish price competition and increase investments in first-party products. As a result of these two effects, we find that firms are more likely to benefit from the exclusivity of the first-party products only when the unit misfit cost is sufficiently high. We also find that firms implementing the non-exclusivity strategy will reduce the investment in the first-party product if the consumers' performance sensitivity is low. When platforms develop the targeted investment in first-party products, we can also see that the exclusivity of the first-party product is not always beneficial to the platform.

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“…Bakos and Halaburda [10] help to fill gap where both side of the market have the possibility to multihome. It uses the Hoteling model to study the competition of platforms with two sides as other literature but focuses on the case of multihoming.…”

Section: Literature Reviewmentioning

confidence: 99%

“…(10) Fixing the commission percentage of group 2, (9) (10) indicate that one more group1 participate presenting on a platform attracts…”

Section: Duopoly Platform When Two Sides Single-homingmentioning

confidence: 99%

Two-sided Platform Pricing and Competition under Realistic Pricing Structure

Jiang

Chen

Xiang³

2021

2021 5th International Conference on E-Business and Internet

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This paper is motivated by the prevailing pricing structure and competition in Chinese food-delivery market. Currently, two oligarchs in China's food-delivery market are Meituan-Dianping Takeout and ELEME Takeout, which accounting for more than 95% of the market share. Both of these platforms charge a percentage commission based on per-transaction price and involve per-agent fee. So far, few research has been found to make analysis under such realistic pricing structure, and we help to fill this gap by developing a model for platform competition based on the model developed by Armstrong. The results we get under the realistic pricing structure and cost verify the propositions of Armstrong under per-transaction fee, which may stem from that the percentage commission charged on per-transaction price is similar to the per-transaction fee.

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Platform Competition with Multihoming on Both Sides: Subsidize or Not?

Cited by 131 publications

References 15 publications

Estimating Demand with Multi-Homing in Two-Sided Markets

Estimating Demand with Multi-Homing in Two-Sided Markets

Exclusivity decision of platforms’ first-party products in a competitive market

Two-sided Platform Pricing and Competition under Realistic Pricing Structure

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