The Economics of Platforms: A Theory Guide for Competition Policy
44 Pages Posted: 28 Jul 2020 Last revised: 16 Aug 2020
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The Economics of Platforms: A Theory Guide for Competition Policy
The Economics of Platforms: A Theory Guide for Competition Policy
Date Written: July 2020
Abstract
We propose an analysis of platform competition based on the academic literature with
a view toward competition policy. First, we discuss to which extent competition can
emerge in digital markets and show which forms it can take. In particular, we underline
the role of dynamics, but also of platform differentiation, consumers multihoming
and beliefs to allow competition in platform markets. Second, we analyze
competition policy issues and discuss how rules designed for standard markets can
perform in two-sided markets. We show that multi-sided externalities create new
opportunities for anti-competitive conducts, often related to pricing and contractual
imperfections.
Keywords: competition policy, networks, platforms, two-sided markets
JEL Classification: D82, L13, L41, L86
Suggested Citation: Suggested Citation