Seminar – Segmentation versus Agglomeration: Competition between Platforms with Competitive Sellers

Professor Martin Peitz, University of Mannheim

For many products, platforms enable sellers to transact with buyers. The research shows that the competitive conditions among sellers shape the market structure in platform industries. If product market competition is tough, sellers avoid competitors by joining different platforms. This allows platforms to sustain high fees and explains why, for example, in some online markets, several homogeneous platforms segment the market. Instead, if product market competition is soft, agglomeration on a single platform emerges, and platforms fight for the dominant position. These insights give rise to novel predictions. For instance, market concentration and fees are negatively correlated in platform industries, which inverts the standard logic of competition.

Speaker bio

Martin Peitz is Professor of Economics at the University of Mannheim (since 2007) and a director of the Mannheim Centre for Competition and Innovation – MaCCI (since 2009). He has been member of the economic advisory group on competition policy (EAGCP) at the European Commission (2013-2016), an academic director of the Centre on Regulation in Europe, CERRE (2012-2016) and head of the Department of Economics (2010-2013). Martin holds a PhD. from Bonn.

Martin Peitz is author of the leading graduate textbook Industrial Organization: Markets and Strategies co-authored with Paul Belleflamme and published by Cambridge University Press. He has widely published in leading economics journals. His research focuses on regulation, industrial organisation and microeconomics.