“…This paper innovates the modeling of two-sided markets with regards to investment incentives and vertical relationships. So far, both the managerial literature on platform innovation and economic models have emphasized innovation in terms of quality or product features (Lin, S. Li, and Whinston, 2011;Scholten, 2011;Boudreau, 2010;Zennyo, 2016;Jung et al, 2019). Bourreau and Verdier (2014) study investment in marginal cost reductions by symmetric firms, and focus on the role of spillover effects.…”