Hagiu Andrei

Platforms, Pricing, Commitment and Variety in Two-sided Markets Hagiu Andrei

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.