Antitrust & Competition Policy Blog

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

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Thursday, November 22, 2012

Monopolistic Location Choice in Two-Sided Industries

Posted by D. Daniel Sokol

Enrico Bohme, Christopher Muller (both Johann Wolfgang Goethe-University) discuss Monopolistic Location Choice in Two-Sided Industries.

ABSTRACT: We analyze the optimal location choice of a monopolistic firm that operates two platforms on a two-sided market. We show that the optimal platform locations are equivalent to the onesided benchmark if both sides are either restricted to single- or multi-homing. In the mixed case (one side single-homes, the other one multi-homes), the optimal platform locations are determined by the relative profitability of both market sides. Our results indicate that modeling mergers on two-sided markets with fixed locations is often inappropriate.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/11/monopolistic-location-choice-in-two-sided-industries.html

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