Negative intra-group externalities in two-sided markets

Paul Belleflamme, Eric Toulemonde

Research output: Contribution to journalArticlepeer-review

Abstract

Two types of agents interact on a pre-existing free platform. Agents value positively the presence of agents of the other type but may value negatively the presence of agents of their own type. We ask whether a new platform can find fees and subsidies so as to divert agents from the existing platform and make a profit. We show that this might be impossible if intra-group negative externalities are sufficiently (but not too) strong with respect to positive inter-group externalities. © (2009) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
Original languageEnglish
Pages (from-to)245-272
Number of pages28
JournalInternational Economic Review
Volume50
DOIs
Publication statusPublished - 1 Feb 2009

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