Article

The Economics of Platforms: A Theory Guide for Competition Policy

Bruno Jullien, and Wilfried Sand-Zantman

Abstract

We propose an analysis of platform competition based on the academic literature with a view towards 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 multi-homing 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

Networks; Platforms; Markets; Competition policy;

JEL codes

  • L13: Oligopoly and Other Imperfect Markets
  • L41: Monopolization • Horizontal Anticompetitive Practices
  • L86: Information and Internet Services • Computer Software
  • D82: Asymmetric and Private Information • Mechanism Design

Replaces

Bruno Jullien, and Wilfried Sand-Zantman, The Economics of Platforms: A Theory Guide for Competition Policy, September 2019, revised July 2020.

Reference

Bruno Jullien, and Wilfried Sand-Zantman, The Economics of Platforms: A Theory Guide for Competition Policy, Information Economics and Policy, vol. 54, n. 100880, 2021.

Published in

Information Economics and Policy, vol. 54, n. 100880, 2021