NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

An Economic Analysis of Platform Sharing

Arghya Ghosh, Hodaka Morita

NBER Working Paper No. 13058
Issued in April 2007
NBER Program(s):   IO

We explore the managerial implications and economic consequences of platform sharing under models of horizontal and vertical product differentiation. By using a common platform across different products, firms can save on fixed costs for platform development. At the same time, platform sharing imposes restrictions on firms' ability to differentiate their products, and this reduces their profitability. It might appear that platform sharing across firms makes consumers worse off because firms cooperate in their product development processes to maximize their joint profit. We find, however, that platform sharing across firms benefits consumers in our framework because it intensifies competition in our horizontal differentiation model, and because it increases the quality of the lower-end product in our vertical differentiation model. We also show new channels through which a merger makes consumers worse off in the presence of platform sharing.

download in pdf format
   (236 K)

email paper

This paper is available as PDF (236 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13058

Published:

Users who downloaded this paper also downloaded these:
Evans and Schmalensee w18783 The Antitrust Analysis of Multi-Sided Platform Businesses
Levin w16852 The Economics of Internet Markets
Evans and Schmalensee w11603 The Industrial Organization of Markets with Two-Sided Platforms
Simcoe, Graham, and Feldman w13632 Competing on Standards? Entrepreneurship, Intellectual Property and the Platform Paradox
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us