Thinking about networks and platforms

I just posted a new paper with Dimitrios Diamantaras on how middlemen compete in a network environment. We view a middleman here as an explicit provider of a two-sided interaction platform. FRom that a theory of competitive behaviour is developed as ambiguous decision making in a game theoretic framework. Here the middleman is ambiguous whether she is contested in her middleman position or not.

Interestingly we conclude that there emerges a mixed picture. In many cases the middleman will continue to extract maximal rents, but if competition is “normal” and effective, then middlemen can actually engage in a more competitive fashion, as expected through a standard Bertrand-like argument.

Visit the economic theory page for details.

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