Platform Competition, Vertical Differentiation, and Price Coherence

2021 ◽  
Vol 64 (3) ◽  
pp. 439-477
Author(s):  
Heiko Gerlach ◽  
Junqian Li
Keyword(s):  
Vertical Differentiation ◽  
Platform Competition

Bundling, Vertical Differentiation, and Platform Competition

2018 ◽  
Vol 17 (1) ◽  
pp. 1-23 ◽  
Author(s):  
Keke Sun
Keyword(s):  
Network Effects ◽  
Vertical Differentiation ◽  
Pricing Strategy ◽  
Platform Competition ◽  
Indirect Network Effects ◽  
Negative Effect ◽  
Complementary Goods ◽  
Two Sides ◽  
Positive Effect

Abstract This paper studies the bundling strategies of two firms that each sell a horizontally differentiated platform and a complementary good. When the complementary goods are vertically differentiated, the firm that sells the superior one can commit to a more aggressive pricing strategy through bundling. In the presence of asymmetry in externalities between the two sides in the platform market, bundling may be profitable without foreclosing the rival when platforms implement cross subsidies from the high-externality side (developers) to the low-externality side (consumers). Bundling has a positive effect on welfare because it allows for better internalization of the indirect network effects and reduces the developer cost of multi-homing, but it also has a negative effect because some consumers consume less-preferred components. Consequently, bundling is socially desirable when platforms are not too differentiated and the vertical differentiation between the complementary goods is high.

scholarly journals Language, internet and platform competition

2021 ◽  
Vol 131 ◽  
pp. 103439
Author(s):  
Doh-Shin Jeon ◽  
Bruno Jullien ◽  
Mikhail Klimenko
Keyword(s):  
Platform Competition

scholarly journals The Role of Coordination Bias in Platform Competition

2016 ◽  
Vol 25 (2) ◽  
pp. 274-312 ◽  
Author(s):  
Hanna Hałaburda ◽  
Yaron Yehezkel
Keyword(s):  
Platform Competition
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