We study the equilibrium for symmetric competition between multi-sided platforms under utility competition and make equilibrium comparison for asymmetric platform competition. We consider the small-ticket effect where the price cap regulation of the large-ticket item leads to a rise of the price for the small-ticket item. We show that competitive price discrimination could lead to higher profits for firms. We build a model with general externality and demand function. We consider a partially covered market and show that the externality could be a bless for firms. Moreover, we conduct a merger analysis for the general demand and externality model.

This paper studies a general model of price competition among platforms offering differentiated services in multi-sided markets. We incorporate a general form of both within-side and cross-side externalities into a discrete choice model of random utility maximization by consumers on each side of the markets. We consider a two-stage game in which the platforms choose prices (or user fees) simultaneously in the first stage, followed by consumers on all sides simultaneously deciding which platform to join (single-homing) in the second stage. We show that in a symmetric setting with full market coverage, there exists a symmetric equilibrium in prices and the equilibrium price on each side follows a simple rule: The price equals the cost, plus a mark-up due to product differentiation, minus a subsidy due to cross-side externalities. The subsidy to each side accounts for the degree of the aggregate marginal externalities of that side imposed on all the other sides. As competition among platforms increases, both the product differentiation effect and the cross-subsidy are shown to decrease. As such, the price on one side can decrease while the price on another side may increase with the number of platforms. We also discuss the incentives for platforms to merge and the extent of excessive free entry of platforms into the markets as compared to the social optimum. We further compare uniform pricing rule with discriminatory pricing across different sides of the markets and find that the average price across sides under the discriminatory pricing is higher than the uniform price when the externalities are small or when the number of platforms is large. The impacts of consumers' outside options on the equilibrium prices are also studied.

Doctoral Thesis / Dissertation from the year 2011 in the subject Economics - Macro-economics, general, European Business School - International University Schlo Reichartshausen Oestrich-Winkel (Department of Governance and Economics), language: English, abstract: This thesis strives to offer new insights in two main areas. First, it investigates the fact that merchant usage fees for payment card services differ substantially among merchant sectors. Second, it identifies the smart (electricity) meter market as a multi-sided market and applies the insights found in the literature to better regulate a market-driven rollout of smart meters. Chapter 2 examines the determination of the merchant usage fee of a monopolistic unitary payment card network based on the characteristics of the downstream market. Merchants engage in Bertrand competition that allows for an observation of heterogeneous products. My coauthor and I find that the payment card network extracts a part of the economic rent that merchants obtain. The rent, and consequently the merchant usage fee, is increasing in the downstream market size, but decreasing in the price elasticity of consumer demand, as well as in the substitutability of products, and in the fraction of consumers who prefer card payments. Chapter 3 undertakes a similar analysis for Cournot competition among merchants. The merchant usage fee is decreasing in terms of the price elasticity of demand and has an inverse V relationship with regard to the fraction of card users. At first, increasing the fraction of cardholders makes accepting cards more attractive for merchants because of the increased sales. At some point, however, the higher costs of handling card transactions outweighs the benefit of increased revenue. Further, card companies can increase profits by influencing consumers to use their cards in sectors with a low price elasticity of demand where they can then tax a merchant's profits more heavily. Chapter 4 looks at smart mete

I develop a general theory of monopoly pricing of networks. Platforms use insulating tariffs to avoid coordination failure, implementing any desired allocation. Profit-maximization distorts in the spirit of Spence (1975) by internalizing only network externalities to marginal users. Thus the empirical and prescriptive content of the popular Rochet and Tirole (2006) model of two-sided markets turns on the nature of user heterogeneity. I propose a more plausible, yet equally tractable, model of heterogeneity in which users differ in their income or scale. My approach provides a general measure of market power and helps predict the effects of price regulation and mergers.

This paper examines price level regulation in two-sided markets with linear demands. We find that (i) price level regulation increases the price allocation asymmetry when reservation prices differ between the two sides of the market; and (ii) changes in the level of the price cap are divided equally between the two sides of the market whether demands are symmetric or asymmetric. Finally, and potentially important from a policy perspective, the numerical simulations suggest that the efficiency gains from price level regulation are relatively modest for a wide range of cost parameters.

'This volume collects a number of original, cutting-edge contributions that take the reader swiftly and easily to the frontier of research on most of the current hot topics in industrial organization, antitrust and regulation. Skillfully edited by two outstanding leaders in the field, the volume will be a precious source for students, researchers and practitioners that need to figure out what research has achieved in recent years on these important policy issues.' Giancarlo Spagnolo, SITE Stockholm School of Economics and University of Tor Vergata, Sweden This state-of-the-art volume highlights important recent research contributions covering all the significant themes surrounding competition policy and regulation, including financial regulation and multisided markets. Bringing scholars and policymakers to the frontiers of research and addressing the critical issues of the day, the book presents original important new theoretical and empirical results. The distinguished contributors include: P. Agrel, K. Alexander, J. Crémer, X. Dassiou, G. Deltas, F. Etro, L. Filistrucchi, P. Fotis, M. Gilli, J. Harrington Jr, T. Huertas, M. Ivaldi, B. Jullien, V. Marques, M. Peitz, Y. Spiegel, E. Tarrantino and G. Wood. Recent Advances in the Analysis of Competition Policy and Regulation will prove insightful for academic economists, consultants and policymakers interested in these fields.

This paper illustrates basic pricing issues in two-sided markets using some simple linear models based on Rochet & Tirole (2006) and Armstrong (2006). Monopoly, first-best and second-best prices when a single platform charges either usage fees or membership fees are examined. Some implications for competition policy and regulation of two-sided markets are are also discussed.