American Economic Journal Microeconomics· 2026Q1
Competitive Bottlenecks and Platform Spillovers
- 9citations
- Q1SCImago
- 2026year
Short summary
Oligopolistic platforms in competitive bottleneck settings distort equilibrium choices against sellers' interests, potentially increasing welfare harm with more competing platforms.
AI-generated from the title and abstract; the full text is not read.
Key points
- Platforms in competitive bottleneck settings distort equilibrium choices against sellers' interests.
- Increased competition among platforms can exacerbate welfare-harming distortions.
- Buyer-side heterogeneity, partial market coverage, platform asymmetry, and spillovers modify welfare distortions.
- Findings have policy implications for mobile app platforms.
AI-generated from the title and abstract; the full text is not read.
Abstract
We provide a general framework to analyze competition between oligopolistic platforms in competitive bottleneck settings, allowing for pricing and nonprice design choices by platforms, and post-participation buyer-seller decisions. We show that equilibrium choices by platforms are distorted against sellers’ interests in a way harmful to welfare (e.g., setting excessive commission fees), and that an increase in the number of competing platforms can exacerbate this distortion. We also characterize how buyer-side heterogeneity in interaction benefits, partial market coverage, platform asymmetry, and cross-platform spillovers further amplify or mitigate welfare distortions. Based on our findings, we discuss policy implications for mobile app platforms. (JEL D43, L13, L25, L96)
The authors' abstract, as published at the source. American Economic Journal Microeconomics, 2026 · DOI ↗
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Field: Strategy and Management
Strategy and ManagementBusiness, Management and Accounting