Platforms, Pricing, Commitment and Variety in Two-Sided Markets

This dissertation studies optimal pricing, variety and commitment by platformsoperating in markets, which combine a two-sided structure with a verticalrelationship.The first essay analyzes the choice of product variety by a two-sided sponsoredplatform. The second essay studies the existence of pure strategy symmetric price equilibriain a generalized version of Salop (1979)?s circular model of competition betweendifferentiated products, in which consumers are allowed to purchase morethan one brand. The third and central chapter of my dissertation proposes a model of Bertrandcompetition between platforms and analyzes the sustainability of dominant platformequilibria in two-sided markets with the following characteristics: i) platforms are essential bottlenecks for buyers to access the products offered by sellers; ii) sellers enter the market before buyers; iii) only sellers can multihome;iv) platforms can charge fixed fees on both sides and variable fees (royalties)to sellers. The most important issue arising in such a context is the ability of platformsto credibly commit to the price they will charge buyers when they set theirprices for sellers.

Andrei Hagiu is an Assistant Professor in the Strategy group at Harvard Business School. His research focuses on multi-sided markets. He graduated from the Ecole Polytechnique in France before obtaining a PhD in economics from Princeton University.