Antitrust & Competition Policy Blog

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

Monday, August 12, 2019

Superstars in two-sided markets: exclusives or not?

By: Elias CarroniLeonardo MadioShiva Shekhar
Abstract: This article studies incentives for a premium provider (Superstar) to offer exclusive contracts to competing platforms mediating the interactions between consumers and firms. When platform competition is intense, more consumers subscribe to the platform hosting the Superstar exclusively. This mechanism is self-reinforcing as firms follow consumer decisions and (some) join exclusively the platform with the Superstar. Exclusivity always benefits firms and may benefit consumers. Moreover, when the Superstar is integrated with a platform, non-exclusivity becomes more likely than if the Superstar was independent. This analysis provides several implications for managers and policy makers operating in digital and traditional markets.
   
   
   
URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_7535&r=com

https://lawprofessors.typepad.com/antitrustprof_blog/2019/08/superstars-in-two-sided-markets-exclusives-or-not.html

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