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Hagiu, Andrei
, Jullien, Bruno and Wright, Julian
(2018)
Creating platforms by hosting rivals.
TSE Working Paper, n. 18-970, Toulouse
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Abstract
We explore conditions under which a multiproduct firm can profitably turn itself into a platform by "hosting rivals", i.e. by inviting rivals to sell products or services on top of its core product. Hosting eliminates the additional shopping costs to consumers of buying a specialist rival's competing version of the multiproduct firm's non-core product. On the one hand, this makes it easier for the rival to compete on the non-core product. On the other hand, hosting turns the rival from a pure competitor into a complementor: the value added by its product now helps raise consumer demand for the multi-product firm's core product. As a result, hosting can be both unilaterally profitable for the multi-product firm and jointly profitable for both firms.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | November 2018 |
| Place of Publication: | Toulouse |
| JEL Classification: | D4 - Market Structure and Pricing L1 - Market Structure, Firm Strategy, and Market Performance L5 - Regulation and Industrial Policy |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse Capitole |
| Site: | UT1 |
| Date Deposited: | 30 Nov 2018 09:15 |
| Last Modified: | 02 Apr 2021 15:58 |
| OAI Identifier: | oai:tse-fr.eu:33123 |
| URI: | https://publications.ut-capitole.fr/id/eprint/26529 |
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