eprintid: 16502 rev_number: 10 eprint_status: archive userid: 1482 importid: 105 dir: disk0/00/01/65/02 datestamp: 2015-03-16 14:44:23 lastmod: 2021-04-02 15:49:21 status_changed: 2015-03-16 14:44:23 type: article succeeds: 3262 metadata_visibility: show creators_name: Bardey, David creators_name: Cremer, Helmuth creators_name: Lozachmeur, Jean-Marie creators_idrefppn: 06064754X creators_idrefppn: 058485376 creators_idrefppn: 179825933 creators_affiliation: University of Rosario, Bogota creators_affiliation: TSE (GREMAQ-CNRS) creators_affiliation: TSE (GREMAQ-CNRS) title: Competition in two-sided markets with common network externalities ispublished: pub subjects: subjects_ECO abstract: We study competition in two sided markets with common network externality rather than with the standard inter-group effects. This type of externality occurs when both groups benefit, possibly with different intensities, from an increase in the size of one group and from a decrease in the size of the other. We explain why common externality is relevant for the health and education sectors. We focus on the symmetric equilibrium and show that when the externality itself satisfies an homogeneity condition then platforms’ profits and price structure have some specific properties. Our results reveal how the rents coming from network externalities are shifted by platforms from one side to other, according to the homogeneity degree. In the specific but realistic case where the common network externality is homogeneous of degree zero, platform's profit do not depend on the intensity of the (common) network externality. This is in sharp contrast to conventional results stating that the presence of network externalities in a two-sided market structure increases the intensity of competition when the externality is positive (and decreases it when the externality is negative). Prices are affected but in such a way that platforms only transfer rents from consumers to providers. date: 2014-06 date_type: published official_url: http://tse-fr.eu/pub/27934 faculty: tse divisions: tse language: en has_fulltext: TRUE subjectsJEL: JEL_D42 subjectsJEL: JEL_L11 subjectsJEL: JEL_L12 view_date_year: 2014 full_text_status: public publication: Review of Industrial Organization volume: 44 pagerange: 327-359 refereed: TRUE oai_identifier: oai:tse-fr.eu:27934 harvester_local_overwrite: oai_set harvester_local_overwrite: faculty harvester_local_overwrite: site harvester_local_overwrite: creators_idrefppn oai_lastmod: 2015-07-31T18:00:02Z oai_set: tse oai_set: ut1c site: ut1 citation: Bardey, David , Cremer, Helmuth and Lozachmeur, Jean-Marie (2014) Competition in two-sided markets with common network externalities. Review of Industrial Organization, 44. pp. 327-359. document_url: https://publications.ut-capitole.fr/id/eprint/16502/1/09-103.pdf