Arbeitspapier
Two-Sided Markets with Pecuniary and Participation Externalities
The existing literature on two-sided markets addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising and offer consumers a service free of charge (such as a TV program) that is financed through advertising. We show that advertising can exhibit the properties of a strategic substitute or complement. Surprisingly, there exist cases in which platforms benefit from market entry. Moreover, we show that from a welfare point of view perfect competition is not always desirable.
- Language
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Englisch
- Bibliographic citation
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Series: SFB/TR 15 Discussion Paper ; No. 133
- Classification
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Oligopoly and Other Imperfect Markets
Entertainment; Media
- Subject
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two-sided markets
broadcasting
advertising
market entry
digital television
- Event
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Geistige Schöpfung
- (who)
-
Schmidtke, Richard
- Event
-
Veröffentlichung
- (who)
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Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
- (where)
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München
- (when)
-
2006
- DOI
-
doi:10.5282/ubm/epub.13418
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-13418-1
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Schmidtke, Richard
- Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Time of origin
- 2006