Duopolistic platform competition for revenue and throughput (2001.11529v1)

Abstract: We consider two competing platforms operating in a two-sided market and offering identical services to their customers at potentially different prices. The objective of each platform is to maximize its throughput or revenue by suitably pricing its services. We assume that customers have a preference or loyalty to the platforms while the workers freelance for the two platforms. Assuming that the resulting interaction between the users is such that their aggregate utility is maximized, we show that for each value of the loyalty, there exists a pure strategy Nash equilibrium for both the throughput and revenue competition game and characterize it.