Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/201664
Authors: 
Weghake, Jens
Erlei, Mathias
Keser, Claudia
Schmidt, Martin
Year of Publication: 
2018
Series/Report no.: 
TUC Working Papers in Economics 18
Abstract: 
We conducted a laboratory experiment to study the price setting behavior in two-sided markets. We seek to answer two specific research questions: Do participants charge the equilibrium prices that can be derived from a theoretical model? How is the price setting affected by the characteristics of the Nash equilibrium? Our study shows that there are hardly any realizations of the Nash equilibrium. Participants seem to use simple heuristics. The increase in complexity caused by asymmetry has two effects: On the one hand, it makes finding the optimal pricing more difficult so that, on average, we find prices that are further away from optimal prices. On the other hand, higher complexity goes along with stronger signals against non-expedient heuristics so that, on an individual level, the equilibrium is reached in more markets.
Subjects: 
two-sided market theory
experiment
duopoly
platform competition
JEL: 
C72
C91
D43
L13
Document Type: 
Working Paper
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