We consider two‐sided markets in which consumers and firms endogenously determine whether they single‐home, multi‐home, or exit the market. We find that the competitive bottleneck allocation in which consumers single‐home and firms multi‐home is always an equilibrium. In addition, we find equilibria with multi‐homing and single‐homing on each side of the market. However, unlike the standard pricing result where the side that multi‐homes faces higher prices, we find that lower prices coincide with multi‐homing: agents find multi‐homing more attractive when faced with lower prices. We also show that endogenous homing can induce straddle pricing which deters price undercutting between platforms.

Tax enforcement is especially costly when market participants are difficult to observe. The benefits of enforcement depend crucially on pre-enforcement compliance. We derive an upper bound on pre-enforcement compliance from the pass-through of newlyenforced taxes. Using data on Airbnb listings and the platform's voluntary collection agreements, we find that taxes are paid on, at most, 24 percent of Airbnb transactions prior to enforcement. We also find that demand for Airbnb listings is inelastic, driving three key insights: the tax burden falls disproportionately on renters, excess burden is small, and tax enforcement is relatively ineffective at reducing local Airbnb activity.

We analyze a Cournot-Bertrand model where one firm competes in output and the other competes in price. With general demand functions and perfectly homogeneous products, we show that the unique Nash equilibrium is the perfectly competitive equilibrium. Equilibrium price equals marginal cost, the Cournot-type firm produces the perfectly competitive level of market output, and the Bertrand-type firm exits the market. Even with just one firm in the market, the presence of a potential Bertrand-type competitor provides sufficient discipline to guarantee a competitive outcome.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: In two-sided markets a platform allows consumers and sellers to interact by creating sub-markets within the platform marketplace. For example, Amazon has sub-markets for all of the different product categories available on its site, and smartphones have sub-markets for different types of applications (gaming apps, weather apps, map apps, ridesharing apps, etc.). The network benefits between consumers and sellers depend on the mode of competition within the sub-markets: more competition between sellers lowers product prices, increases the surplus consumers receive from a sub-market, and makes platform membership more desirable for consumers. However, more competition also lowers profits for a seller which makes platform membership less desirable for a seller and reduces seller entry and the number of sub-markets available on the platform marketplace. This dynamic between seller competition within a sub-market and agents' network benefits leads to platform pricing strategies, participation decisions by consumers and sellers, and welfare results that depend on the mode of competition. Thus, the sub-market structure is important when investigating platform marketplaces. Terms of use: Documents in

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