The tension between market shares and profit under platform competition

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Key Question Being Explored in This Insight:

The definition and measurement of market power are central issues in the theory of industrial organization. Paul Belleflamme discusses market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform, raising further doubts on using market shares as a measure of market power in platform markets.

View the page of: Paul Belleflamme

Institution: Université catholique de Louvain

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The definition and measurement of market power are central issues in the theory of industrial organization. Paul Belleflamme discusses market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform, raising further doubts on using market shares as a measure of market power in platform markets.

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Image courtesy of interviewee. May 26, 2023

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