In this paper we generalize the model of single-homing users in two-sided markets by Gabszewicz and Wauthy [2014] to the case of any logconcave distribution of the willingness to pay (WTP). Our extended model allows us to discuss how distributional assumptions affect equilibrium outcomes, as well as to highlight the role of the assumption that both sides of the market are described by the same distribution of the WTP: while equilibrium does exist when this common distribution is logconcave, our results cast some doubts on existence when the two distributions differ.
Platform competition and willingness to pay in a vertically differentiated tw-sided market / Francesco Angelini, Corrado Benassi, Massimiliano Castellani. - In: ECONOMICS BULLETIN. - ISSN 1545-2921. - ELETTRONICO. - 41:2(2021), pp. 772-780.
Platform competition and willingness to pay in a vertically differentiated tw-sided market
Francesco Angelini;Corrado Benassi;Massimiliano Castellani
2021
Abstract
In this paper we generalize the model of single-homing users in two-sided markets by Gabszewicz and Wauthy [2014] to the case of any logconcave distribution of the willingness to pay (WTP). Our extended model allows us to discuss how distributional assumptions affect equilibrium outcomes, as well as to highlight the role of the assumption that both sides of the market are described by the same distribution of the WTP: while equilibrium does exist when this common distribution is logconcave, our results cast some doubts on existence when the two distributions differ.| File | Dimensione | Formato | |
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