Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75019
Authors: 
Reynaerts, Jo
Van Cayseele, Patrick
Year of Publication: 
2007
Series/Report no.: 
LICOS Discussion Paper 186
Abstract: 
We introduce an analytical framework close to the canonical model of platfirm competition investigated by Rochet and Tirole (2006) to study pricing decisions in two-sided markets when two or more platfirms are needed simultaneously for the successful completion of a transaction. The model developed is a natural extension of the Cournot-Ellet theory of complementary monopoly featuring clear cut asymmetric single- and multihoming patterns across the market. The results indicate that the so-called anticommons problem generalizes to two-sided markets because individual platfirms do not take into account the negative pricing externality they exert on the other platfirms. As a result, mergers between such platfirms may be welfare enhancing, but involve redistribution of surplus from one side of the market to the other. Moreover, the limit of an atomistic allocation of property rights however is not monopoly pricing, indicating that there also exist differences with the received theory of complementarity.
Subjects: 
Two-Sided Markets
Complements
The Anticommons Problem
JEL: 
D43
D62
K11
L13
L4
L5
Document Type: 
Working Paper

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