Open AccessJournal Article
"Monopolies in Two-Sided Markets: Comparative Statics and Identification"
TL;DR: In this article, the authors provide a full set of comparative statics for three models, one that generalizes that of Rochet and Tirole (2003), a second generalizes Armstrong (2006) and a third that fuses the two models.
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Abstract: Many models of monopoly in two-sided markets have been proposed (Rochet and Tirole, 2006), but little is known about them. I provide a full set of comparative statics for three models, one that generalizes that of Rochet and Tirole (2003), a second that generalizes Armstrong (2006) and a third that fuses the two models. This answers a number of questions central to the theoretical literature, such as the effects of market power and price controls and the relationship between different models. I also show how, given exogenous cost variations, these models can be almost fully (locally) identified (e.g. market power and predatory pricing), tested and distinguished from one another. I highlight applications of the results to a wide variety of theoretical, empirical and policy questions, including merger analysis.
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Citations
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References
Competition in Two-Sided Markets ¤
TL;DR: In this article, the authors survey recent theoretical work on two-sided markets and the main questions are (i) what determines which side of the market is subsidized (if either) in order to attract the other side, and (ii) is the resulting outcome socially e¢cient?
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