Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/177851
Authors: 
Jeitschko, Thomas D.
Kim, Soo Jin
Yankelevich, Aleksandr
Year of Publication: 
2018
Series/Report no.: 
DICE Discussion Paper 286
Abstract: 
We study a Hotelling framework in which customers first pay a monopoly platform to enter the market before deciding between two competing services on opposite ends of a Hotelling line. This setup is common when modeling competition in Internet content provision. We find that standard taken-for-granted solution methods under full market coverage break down, and that in the unique full-coverage equilibrium, the competing service providers set substantially lower prices. Standard methods and prices are restored by giving service providers the first move.
Subjects: 
Hotelling Model
First Mover Advantage
Two-Sided Market
JEL: 
D21
D43
L0
ISBN: 
978-3-86304-285-1
Document Type: 
Working Paper
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