Negative intra-group externalities in two-sided markets

Belleflamme, Paul;Toulemonde, Eric
(2009) International Economic Review — Vol. 50, n° 1, p. 245-272 (2009)

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Abstract
Two types of agents itneract on a pre-existing free platform. Agents value positively the presence of agents of the other type but may value negatively the presence of agents of their own type. We ask whether a new platform can find fees and subsidies so as to divert agents from the existing paltform and make a profit. We show that this might be impossible if intra-group negative externalities are sufficiently (but not too) strong with respect to positive inter-group externalities.
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Belleflamme, P., & Toulemonde, E. (2009). Negative intra-group externalities in two-sided markets. International Economic Review, 50(1), 245-272. https://doi.org/10.1111/j.1468-2354.2008.00529.x (Original work published 2009)