Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/177851 
Year of Publication: 
2018
Series/Report no.: 
DICE Discussion Paper No. 286
Publisher: 
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), Düsseldorf
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

Files in This Item:
File
Size
473.31 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.