Can Multiple Platforms Profitably Co-Exist in Digital Markets?

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In the internet age, digital platforms are providing increasingly important settings for buyers and sellers to interact. In this video, MARTIN PEITZ investigates why some markets tend to be dominated by single platforms (e.g. Google for internet search) while others (e.g. hotel booking) allow multiple platforms to profitably co-exist. Using theoretical modeling, the research indicates that sellers in particular markets may prefer to locate themselves in distinct platforms in order to reduce the intensity of competition. Enhancing our understanding of how digital markets function, Peitz’s work provides valuable underpinning for future competition policy.

DOI:

https://doi.org/10.21036/LTPUB10633

Tags:

Digital Economy

Researcher

Martin Peitz is Professor of Economics at the University of Mannheim and co-director of the Mannheim Centre of Competition and Innovation (MaCCI). His research focuses on theoretical industrial organization and ongoing projects include work on non-standard consumer behavior and regulation and competition issues in digital markets. He holds research fellowships with the Centre on Regulation in Europe (CERRE) and the Economics Network for Competition and Regulation (ENCORE) among others. The second edition of Peitz’s book Industrial Organization: Markets and Strategies (co-authored with Paul Belleflame) was published in 2015.

Institution

University of Mannheim (Universität Mannheim)

For generations, the University of Mannheim has been preparing students to take on leadership roles in business, academia, and society. One of the university’s strengths in this task is its profile, which is characterized by the economic and social sciences. It is in these fields that the University of Mannheim has repeatedly been ranked as one of the top 20 European research institutions. Key focuses of Mannheim researchers include decision-making processes and elections, governance, regulation, competition and innovation, migration and multilingualism, and the culture of change. The campus surrounding Mannheim’s baroque palace is a place where bright minds from across the globe come together to learn, discuss, research, and prepare to make their mark on the world.

Original publication

Segmentation Versus Agglomeration: Competition Between Platforms with Competitive Sellers

Karle Heiko, Peitz Martin and Reisinger Markus

CEPR Discussion Paper

Published in 2017

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