Article

Search Diversion and Platform Competition

Andrei Hagiu et Bruno Jullien

Résumé

Platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products (e.g. advertising). We show that competition between platforms leads to lower equilibrium levels of search diversion relative to a monopoly platform when the intensity of competition is high. On the other hand, if there is only mild competition, then competing platforms induce more search diversion relative to a platform monopolist. When platforms charge consumers fixed access fees, all equilibrium levels of search diversion under platform competition are equal to the monopoly level, irrespective of the nature of competition. Furthermore, relative to platforms that cannot charge such fees, platforms that charge positive (negative) access fees to consumers have weaker (stronger) incentives to divert search

Mots-clés

Search-diversion; Two-sided markets; Competition; Advertising; Exclusivity;

Codes JEL

  • D4: Market Structure and Pricing
  • L1: Market Structure, Firm Strategy, and Market Performance
  • L5: Regulation and Industrial Policy

Remplace

Andrei Hagiu et Bruno Jullien, « Search Diversion and Platform Competition », TSE Working Paper, n° 13-431, septembre 2013.

Référence

Andrei Hagiu et Bruno Jullien, « Search Diversion and Platform Competition », International Journal of Industrial Organization, vol. 33, mars 2014, p. 48–60.

Voir aussi

Publié dans

International Journal of Industrial Organization, vol. 33, mars 2014, p. 48–60