Strengthening Buyer Power as a Solution to Platform Market Power

By Hugh Mullan & Natalie Timan 

There are numerous examples of digital platforms with market power. There have been calls to regulate these platforms. This article explores an alternative way of tempering any significant market power by changing the relative bargaining strength of the platform vis-à-vis its customers. The bargaining strength of any customer will depend on the number and strength of the credible outside options available to that customer. Platforms, which are multi-sided in their nature, display network effects. These network effects, in turn, create coordination problem…

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