RSSE Markus Kinateder (Universidad de Navarra) Prices and mergers in a general model of multi-sided markets

It is our pleasure that prof. Markus Kinateder (Universidad de Navarra) will present on Thursday, February 16, 2022, at 12:45 in room RB437 about his research on the topic “Prices and mergers in a general model of multi-sided markets“

Registration is not required and anyone who would like to attend is warmly invited.

BIO:Markus Kinateder is a Resident Fellow associated with the Navarra Center for International Development. He received his Ph.D. from Universidad Autónoma de Barcelona in 2008, and an MSc in Economics from the London School of Economics in 2003. He is an Associate Professor at the Faculty of Economics of the University of Navarra. His research is in theoretical and applied Microeconomics with publications in journals such as American Economic Journal, Microeconomics or Experimental Economics.

ABSTRACT: We present a general and tractable oligopoly model of multi-sided platforms that accommodate both endogenous side and platform choices of heterogeneous end-users. These features are considered for single- and multi-homing platforms and assume that participation on one side could preclude doing so on others. We show the existence and uniqueness of the equilibrium number of end-users and derive platforms’ optimal prices. Using the equilibrium conditions, we formally characterize a set of the novel (across sides and platforms) switching effects that distort the optimal pricing of platforms, leading in some cases to markups greater than the usual Lerner index, and that rule out the classical “cross-subsidization” result. The characterization of these novel effects allows us to provide a unifying framework to analyze mergers of multi-sided platforms, which rationalizes mixed results in the previous literature. While the nature of end-users' side choices determines optimal pricing, their platform choices are crucial for merger analysis.