An Empirical Model of Mobile App Competition

51 Pages Posted: 11 Dec 2020 Last revised: 30 Sep 2022

See all articles by Kohei Kawaguchi

Kohei Kawaguchi

Hong Kong University of Science and Technology

Toshifumi Kuroda

Tokyo Keizai University

Susumu Sato

Institute of Economic Research, Hitotsubashi University

Date Written: September 29, 2022

Abstract

This paper proposes an empirical model of mobile app competition, in which consumers decide downloads and usage time, and apps compete in price and advertising intensity. We estimate the model using data from Google Play in Japan from 2015 to 2017. We demonstrate merger simulation and the analysis of the vertical relation with Google Play. We find that a reduction of the fee imposed by Google Play can increase the price for game apps by inducing the shift of revenue source from advertising to downloads, highlighting the importance of considering two-sidedness and mixed business models.

Keywords: Merger simulation, market definition, SSNIP, antitrust policy, ad-sponsored media, mixed business models, platform transaction fee, app economy

JEL Classification: L11, L13, L41, L86, M13, M21.

Suggested Citation

Kawaguchi, Kohei and Kuroda, Toshifumi and Sato, Susumu, An Empirical Model of Mobile App Competition (September 29, 2022). TPRC48: The 48th Research Conference on Communication, Information and Internet Policy, Available at SSRN: https://ssrn.com/abstract=3746830 or http://dx.doi.org/10.2139/ssrn.3746830

Kohei Kawaguchi

Hong Kong University of Science and Technology ( email )

6070 LSK Building, HKUST
Clear Water Bay
Kowloon
Hong Kong

Toshifumi Kuroda (Contact Author)

Tokyo Keizai University

1-7-34, Minami-cho, Kokubunji-shi,
Tokyo, Tokyo 185-8502
Japan

HOME PAGE: http://www.tku.ac.jp/~kuroda/index.html

Susumu Sato

Institute of Economic Research, Hitotsubashi University ( email )

Tokyo
Japan

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