Platform competition : who benefits from multihoming?

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URL:	https://ub-madoc.bib.uni-mannheim.de/43193
URN:	urn:nbn:de:bsz:180-madoc-431939
Document Type:	Working paper
Year of publication:	2017
The title of a journal, publication series:	Working Paper Series
Volume:	17-05
Place of publication:	Mannheim
Publication language:	English
Institution:	School of Law and Economics > Industrieökonomik, Wettbewerbspolitik u. Regulierung (Peitz 2007-)
MADOC publication series:	Department of Economics > Working Paper Series
Subject:	330 Economics
Classification:	JEL: D43 , L13 , L86,
Keywords (English):	Network effects , two-sided markets , platform competition , competitive bottle- neck , multihoming
Abstract:	Competition between two-sided platforms is shaped by the possibility of multihoming. If users on both sides singlehome, each platform provides users on either side exclusive access to its users on the other side. In contrast, if users on one side can multihome, platforms exert monopoly power on that side and compete on the singlehoming side. This paper explores the allocative effects of such a change from single- to multihoming. Our results challenge the conventional wisdom, according to which the possibility of multihoming hurts the side that can multihome, while benefiting the other side. This is not always true: the opposite may happen or both sides may benefit.