Speaker: Dr.丁蓉 (Rong Ding)

Title: Network Effects and Sustainability of Collusion between Differentiated Two-sided Platforms

Schedule: Dec 11, Wed 11:00-12:00 AM

Location: 诚明楼 (Chengming Hall), Rm 315

Introduction: 丁蓉副教授，新加坡国立大学经济学博士, 对外经济贸易大学国际经济贸易学院副教授，研究方向为产业经济学、微观经济理论。

Abstract: We consider a market where buyers and sellers choose between two-sided platforms. Sellers directly charge buyers in their transactions of products while platforms charge buyers membership fees. In the scenario where platforms collude on setting the membership fees, we show that as the network effect increases, there is first a negative then a positive relationship between network effect and the sustainability of symmetric collusion, while there is always a negative relationship between network effect and the sustainability of asymmetric collusion. Moreover, we find that the symmetric collusion between platforms does not reduce social welfare and the asymmetric collusion improves welfare, compared to the cases where platforms compete rather than collude. Thus, a policy implication is that competition may not be encouraged in two-sided markets with dominant platforms.