2019/08/02 by Heiko Karle, Martin Peitz, Markus Reisinger · 2 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Business #Commerce #Competition (biology) #Competitor analysis #Consumer Market Behavior and Pricing #Digital Platforms and Economics #Economics #Economies of agglomeration #Homogeneous #Industrial organization #Market segmentation #Marketing #Merger and Competition Analysis #Microeconomics #Position (finance) #Product (mathematics) #Product market
paper · doi:10.1086/705720
openalex publication_date 2019/08/02 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/02
For many products, platforms enable sellers to transact with buyers. We show that the competitive conditions among sellers shape the market structure in platform industries. If product market competition is tough, sellers avoid competitors by joining different platforms. This allows platforms to sustain high fees and explains why, for example, in some online markets, several homogeneous platforms segment the market. Instead, if product market competition is soft, agglomeration on a single platform emerges, and platforms fight for the dominant position. These insights give rise to novel predictions. For instance, market concentration and fees are negatively correlated in platform industries, which inverts the standard logic of competition.