Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Tuesday, August 17, 2010

A Tale of Two Games: Membership Versus Usage in Platform Competition

Posted by D. Daniel Sokol

Pai-Ling Yin (MIT Sloan) discusses A Tale of Two Games: Membership Versus Usage in Platform Competition.

ABSTRACT:  Demand in platform competition is characterized by a 2-stage game: first, demanders decide whether to adopt a platform, and THEN they decide how much to use the platform. However, with the exception of Bedre & Calvano (2010) and Estelle & Yin (2008), the distinction between membership demand and demand for usage is typically ignored. Consumers are assumed to make their membership choice only after considering usage. If membership and usage are perfectly correlated and simultaneous, there is no loss from simply treating membership and usage as the same or ignoring membership altogether. However, this article will illuminate the ways in which membership is distinct from usage, leading to important strategic and policy implications from distinguishing between membership and usage in platform competition.

http://lawprofessors.typepad.com/antitrustprof_blog/2010/08/a-tale-of-two-games-membership-versus-usage-in-platform-competition.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0133f2b78e1f970b

Listed below are links to weblogs that reference A Tale of Two Games: Membership Versus Usage in Platform Competition:

Comments

Post a comment