Price Competition between Platforms: Equilibrium Coexistence on Competing Online Auction Sites revisited

We investigate the equilibrium market structure on competing online auction sites such as those of eBay or Yahoo!. Building on the model of Ellison, Fudenberg, & Möbius (2004) we take full account of the com-plexity of network e¤ects on such platforms. We extend the model by looking at the implication of exogenous and endogenous buyer and seller charges making use of contingent tari¤s. This extension brings in line the theory with the empirical \u85ndings of Brown & Morgan (2006). Eventually we investigate welfare e¤ects, look at the viability of duopoly with size di¤erentials, and the implications for large markets and policy.