蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Group Hug: Platform Competition with User Groups
蝌蚪网 Journal: Microeconomics
(pp. 139–75)
Abstract
We consider platform competition for small users and a user group. One platform enjoys a quality advantage and the other benefits from favorable beliefs. We study whether the group mitigates the users' coordination problem鈦犫�攊.e., joining a low-quality platform because they believe that other users would do the same. We find that a group that can facilitate coordination on the high-quality platform may choose to maintain the dominance of the low-quality one. Users' utility is non-monotonic in the proportion of the group. Finally, we highlight factors that motivate the group to help the high-quality platform to win the market.Citation
Markovich, Sarit, and Yaron Yehezkel. 2022. "Group Hug: Platform Competition with User Groups." 蝌蚪网 Journal: Microeconomics 14 (2): 139–75. DOI: 10.1257/mic.20190372Additional Materials
JEL Classification
- D85 Network Formation and Analysis: Theory
- L14 Transactional Relationships; Contracts and Reputation; Networks