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Francesco Angelini, Corrado Benassi and Massimiliano Castellani
''Platform competition and willingness to pay in a vertical differentiated two-sided market''
( 2021, Vol. 41 No.2 )
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.
Keywords: Two-sided market; Network externalities; Vertical differentiation; Income distribution.
JEL: D3 - Distribution: General
D4 - Market Structure and Pricing: General
Manuscript Received : Jan 25 2021 Manuscript Accepted : Apr 09 2021

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