Tax Incidence on Competing Two-Sided Platforms: Lucky Break or Double Jeopardy

Belleflamme, Paul;Toulemonde, Eric
(2016)

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We consider the effects of taxes for competing two-sided platforms. We first detail how a platform passes a tax increase on its prices. Adding price competition, we study next how the tax effects profits. Because of the strategic implications of the cross-side external effects, the tax increase may end up increasing the profit of the taxed platform (lucky break) or, conversely, reducing it twice (double jeopardy).
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Belleflamme, P., & Toulemonde, E. (2016). Tax Incidence on Competing Two-Sided Platforms: Lucky Break or Double Jeopardy. https://hdl.handle.net/2078.5/184816