This model explores equilibrium and user participation in platform oligopoly, highlighting network effects and entry dynamics.
We propose a tractable model of asymmetric platform oligopoly with logit demand in which users from two distinct groups are subject to within‐group and cross‐group network effects and decide which platform to join. We characterize the equilibrium when platforms manage user access by setting participation fees for each user group. We explore the effects of platform entry, a change of incumbent platforms' quality under free entry, and the degree of compatibility. We show how the analysis can be extended to partial user participation.
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Peitz et al. (2025) studied this question.
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