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Negative Intra-Group Externalities In Two-Sided Markets

Article
Author/s: 
Paul Belleflamme andEric Toulemonde
International Economic Review
Issue number: 
1
Year: 
2009
Journal pages: 
245–272
Webpage [1]
Two types of agents interact on a pre-existing free platform. Agents value positively the presence of agents of the other type but may value negatively the presence of agents of their own type. We ask whether a new platform can find fees and subsidies so as to divert agents from the existing platform and make a profit. We show that this might be impossible if intra-group negative externalities are sufficiently (but not too) strong with respect to positive inter-group externalities.

Source URL:http://coalitiontheory.net/content/negative-intra-group-externalities-two-sided-markets

Links
[1] http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2354.2008.00529.x/abstract