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.
Collusion; Two-sided markets; Cross-group externalities;
- L41: Monopolization • Horizontal Anticompetitive Practices
- D43: Oligopoly and Other Forms of Market Imperfection
International Journal of Industrial Organization, vol. 72, n. 102656, September 2020