2020
DOI: 10.3386/w28047
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Dog Eat Dog: Measuring Network Effects Using a Digital Platform Merger

Abstract: Digital platforms are increasingly the subject of regulatory scrutiny. In comparison to multiple competitors, a single platform may increase consumer welfare if network effects are large or may decrease welfare due to higher prices or reduction in platform variety. We study the net effect of this trade-off in the context of the merger between the two largest platforms for pet-sitting services. We exploit variation in pre-merger market shares and a difference-in-differences approach to causally estimate network… Show more

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Cited by 12 publications
(5 citation statements)
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“…In recent years, scholarly attention toward the role and impact of platform mergers and acquisitions (M&A) has surged, as evidenced by the works of Chakrabarty (2016), Motta and Peitz (2021), Katz (2021), and Farronato et al (2020). The distinctiveness of M&A in trading platforms lies in the possession of substantial user data by both acquiring and acquired parties, as argued by Chen (2020) and Chen et al (2022).…”
Section: Introductionmentioning
confidence: 99%
“…In recent years, scholarly attention toward the role and impact of platform mergers and acquisitions (M&A) has surged, as evidenced by the works of Chakrabarty (2016), Motta and Peitz (2021), Katz (2021), and Farronato et al (2020). The distinctiveness of M&A in trading platforms lies in the possession of substantial user data by both acquiring and acquired parties, as argued by Chen (2020) and Chen et al (2022).…”
Section: Introductionmentioning
confidence: 99%
“…Lee (2013) considers software compatibility (exclusivity) arrangements in video game platforms using a dynamic model of demand that holds fixed prices and investments. In a natural experiment, Farronato et al (2020) find that service and usage outcomes change little when two competing pet sitting platforms merge.…”
Section: Introductionmentioning
confidence: 99%
“…Lee (2013) considers software compatibility (exclusivity) arrangements in video game platforms using a dynamic model of demand that holds fixed prices and investments. In a natural experiment, Farronato, Fong, and Fradkin (2020) find that service and usage outcomes change little when two competing pet sitting platforms merge.…”
Section: Introductionmentioning
confidence: 99%