American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Estimating Platform Market Power in Two-Sided Markets with an Application to Magazine Advertising
American Economic Journal: Microeconomics
vol. 13,
no. 2, May 2021
(pp. 35–67)
Abstract
In two-sided markets, two groups of agents interact through platforms. Because agents' decision to join a platform is affected by the presence of agents on the other side, their interactions create indirect network externalities and make platforms' strategies different from those of firms in one-sided markets. In this paper, I use a structural model to show that platforms may take a loss on one side of the market to make a profit on the other side and that platform mergers may benefit some agents by lowering prices or attracting more agents on the other side of the market.Citation
Song, Minjae. 2021. "Estimating Platform Market Power in Two-Sided Markets with an Application to Magazine Advertising." American Economic Journal: Microeconomics, 13 (2): 35–67. DOI: 10.1257/mic.20160052Additional Materials
JEL Classification
- D62 Externalities
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- L82 Entertainment; Media
- M37 Advertising
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