Thursday, February 7, 2019
Correia da silva, Joao; Jullien, Bruno; Lefouili, Yassine; Pinho, Joana address Horizontal Mergers Between Multi-Sided Platforms: Insights from Cournot Competition.
ABSTRACT: This paper discusses the literature on horizontal mergers between multi-sided platforms and argues that the Cournot model can provide useful insights into the welfare effects of such mergers. To illustrate those insights, we develop a simple model in which two-sided platforms offer a homogeneous service and compete à la Cournot, and derive the effects of "average-marginal-cost-preserving" mergers on consumers on both sides of the market. We conclude with a discussion of several research avenues that could be explored to understand better the impact of horizontal mergers between multi-sided platforms.