Managing competition on a two‐sided platform

Belleflamme, Paul; Peitz, Martin

doi:10.1111/jems.12311

Cited by 65 publications

(36 citation statements)

References 46 publications

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“…For instance,Lee (2013) found that the video game industry features poor substitutability of videogames and the presence of a handful number of Superstar titles which can impact console sales by as much as 5%. For a model with competing firms on the seller side, see e.g.,Belleflamme & Toulemonde (2009),Belleflamme & Peitz (2019a),Karle et al (2019). 15 This is partly similar to what presented byKourandi et al (2015), who study the contractual decision made by Internet Service Providers to content providers.…”

supporting

confidence: 60%

Superstars in Two-Sided Markets: Exclusives or Not?

2018

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This article studies incentives for a premium provider (Superstar) to offer exclusive contracts to competing platforms mediating the interactions between consumers and firms. When platform competition is intense, more consumers affiliate with the platform favored by Superstar exclusivity. This mechanism is selfreinforcing as firms follow consumer decisions and some join the favored platform only. Exclusivity always benefits firms and might eventually benefit consumers. A vertical merger (platform-Superstar) makes non-exclusivity more likely than if the Superstar was independent. The analysis provides novel insights for managers and policymakers and it is robust to several variations and extensions.

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supporting

confidence: 60%

Superstars in Two-Sided Markets: Exclusives or Not?

2018

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“…This growth mostly depends on a sentence/decision of the Autorità Garante della Concorrenza e del Mercato (Italian antitrust) that has freed taxi drivers to use more than a single platform (traditional or digital) to get the rides. These data show that this platform can be considered as a good example of best practice, and so it is interesting to explore and describe the main strategies its management has designed and implemented to reduce the complexity embedded in the chicken and egg paradox and to leverage effectively the interconnection between the two subsystems (both passengers and taxi drivers) to create a stronger set of value creation processes that enhance the possibility of platform diffusion (Evans et al, 2011;Belleflamme and Peitz, 2018;Mäntymäki et al, 2019;Wang and Yang, 2019) and increasing its chances of an emergent behavior (Walby, 2007;Galkina and Atkova, 2020).…”

Section: Methodsmentioning

confidence: 99%

A solution for the chicken and egg paradox in taxi e-hailing platforms: some evidence from the MyTaxi – FreeNow case

Tani

Troise

Basile

2021

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Purpose This study aims to explore the chicken and egg paradox in the taxi e-hailing business contributing to define a condition of system emergence. This paradox is a meaningful one as these platforms represent a system where the passengers systems have no reason to participate if they have no drivers-systems to answer their call, but, at the same time, the platform is not useful to the drivers-system if there are no passengers-systems using the platform. Design/methodology/approach To understand how this paradox has been dealt with in the taxi e-hailing business, this study focused on a case study on a best practice in Italian taxi e-hailing industry (i.e. MyTaxi/FreeNow). This study wants to comprehend which actions have been implemented to solve this paradox and has tried to identify the interconnections between the various strategies to create a closed loop diagram for further testing. Findings This study has found that the company did not choose a single “subsystem” (passenger or driver), but it has stimulated the creation of several mutually reinforcing motivation for have both subsystems interact to help the company grow. Originality/value To the best of the authors’ knowledge, this paradox has never been studied using the complex adaptive system perspective. This perspective is particularly useful in this case and in the similar ones with several different interacting factors that cannot be really studied without using a higher order perspective.

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“…Multi-homing of consumers is an important feature of online markets. It has also been discussed extensively in the literature such as Athey et al (2016), Belleflamme & Peitz (2019a), Bakos & Halaburda (2019) and others. 34 .…”

Section: Multi-homing Consumersmentioning

confidence: 99%

Zero Pricing Platform Competition

Shekhar

2020

SSRN Journal

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This article studies competition between different types of ad-funded platforms attracting consumers with free services. Consumers often find advertisements a nuisance on such platforms. We study how under a competitive setting platforms balance the tension between attracting consumers and rent extraction from the advertising side. We propose a flexible yet simple model that studies competition between standard platforms and social media platforms (with same-side network effects). We find that an increase in either positive same-side network effects or an increase in consumer disutility from advertisements leads to a reduction in the number of ads on that platform. When competing platforms merge, consumer side network effects do not impact prices and the number of ads is higher. In a setting where consumers present a negative (congestion) externality on each other, competition fails to protect consumer welfare and behaves erratically. Finally, we present a few extensions and discuss some policy implications.

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Managing competition on a two‐sided platform

Cited by 65 publications

References 46 publications

Superstars in Two-Sided Markets: Exclusives or Not?

Superstars in Two-Sided Markets: Exclusives or Not?

A solution for the chicken and egg paradox in taxi e-hailing platforms: some evidence from the MyTaxi – FreeNow case

Zero Pricing Platform Competition

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