B2b Marketplaces: Emergence and Entry
CORE Discussion Paper No. 2004/78
38 Pages Posted: 15 Apr 2005
Date Written: November 2004
In a successive vertical oligopoly, a set of sellers produce some input to be transformed into a final product by a set of buyers. On this two-sided market, a firm's profit increases with the number of firms of the other type and decreases with the number of firms of its own type. We examine the emergence or the entry of a new marketplace sponsored by a profit-maximizing intermediary who targets buyers and sellers in sequential way by setting membership fees (or subsidies).
Keywords: two-sided markets, vertical oligopoly, B2B
JEL Classification: L11, L13, L23
Suggested Citation: Suggested Citation