Research Summary
Research Summary
Competing Platforms
Description
This paper focuses on platform-intermediated markets where there
are a small number of firms on one side and analyzes the strategic
competition among platforms to get the oligopolistic side
on-board. Due to the prevalence of both same and cross-side
externalities, previous bilateral contracting approaches have been
inadequate for studying these types of markets. I introduce a framework
that allows for general externalities among platforms and firms,
and address when a market will sustain a single or multiple
platforms. When firms can only join one platform, I provide
conditions under which market-tipping and/or market-splitting
equilibria may exist, and illustrate how either may still be
inefficient despite the presence of contingent contracts.