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URL:
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https://ub-madoc.bib.uni-mannheim.de/43128
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URN:
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urn:nbn:de:bsz:180-madoc-431286
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Document Type:
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Working paper
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Year of publication:
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2017
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The title of a journal, publication series:
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Working Paper Series
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Volume:
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17-03
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Place of publication:
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Mannheim
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Publication language:
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English
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Institution:
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School of Law and Economics > VWL, Industrieökonomik, Wettbewerbspolitik u. Regulierung (Peitz 2007-)
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MADOC publication series:
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Department of Economics > Working Paper Series
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Subject:
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330 Economics
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Classification:
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JEL:
L13 , D43,
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Keywords (English):
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intermediation , two-sided markets , market structure , price competition , endogenous segmentation
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Abstract:
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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.
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Working Paper Series
Mannheim
17-03
[Working paper]
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