Article

Collusion between two-sided platforms

Yassine Lefouili, and Joana Pinho

Abstract

We study the price and welfare effects of collusion between two-sided platforms and show that they depend on whether collusion occurs on both sides or a single side of the market, and whether users single-home or multi-home. Our most striking result is that one-sided collusion leads to lower (resp. higher) prices on the collusive (resp. competitive) side if the cross-group externalities exerted on the collusive side are positive and sufficiently strong. One-sided collusion may, therefore, benefit the users on the collusive side and harm the users on the competitive side. Our findings have implications regarding cartel detection and damages actions.

Keywords

Collusion; Two-sided markets; Cross-group externalities;

JEL codes

  • L41: Monopolization • Horizontal Anticompetitive Practices
  • D43: Oligopoly and Other Forms of Market Imperfection

Replaces

Yassine Lefouili, and Joana Pinho, Collusion between two-sided platforms, TSE Working Paper, n. 18-894, February 2018, revised July 2020.

Reference

Yassine Lefouili, and Joana Pinho, Collusion between two-sided platforms, International Journal of Industrial Organization, vol. 72, n. 102656, September 2020.

Published in

International Journal of Industrial Organization, vol. 72, n. 102656, September 2020