Tying in Two-Sided Markets with Multi-Homing
By Jay Pil Choi. Social Science Research Network, 2010
295 citations recorded by the source corpus.
This paper analyzes the effects of tying arrangements on market competition and social welfare in two-sided markets when economic agents can engage in multi-homing; that is, they can participate in multiple platforms in order to reap maximal network benefits. The model shows that tying induces more consumers to multi-home and makes platform-specific exclusive contents available to more consumers, which is also beneficial to content providers. As a result, tying can be welfare-enhancing if multi-homing is allowed, even in cases where its welfare impacts are negative in the absence of multi-homing. The analysis thus can have important implications for recent antitrust cases in industries where multi-homing is prevalent.
Subfields: Economics and Econometrics, Media Technology, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/252e5fd8891f7ec87adb70c6d2a1309393e3ec1d
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Citations in the corpus
- Net Neutrality and Investment Incentives (2010, unknown): “…either content service, and that v is sufficiently large so that the market is fully covered in both regimes of networks.9 As in Cheng et al. (2009), Choi (2010), and Economides and Tåg (2007), we assume that content providers adopt a business model that offers their services without any direct…”
- Information and Two-Sided Platform Profits (2014, background): “Setting λ = 0, we obtain (5), (6) and (7).”