Strategically Free: Platform Competition and Pre-Commitment (joint with Eric Toulemonde, UNamur)

Join us for a Brown Bag Lunch Seminar presented by Prof. Paul Belleflamme from the Economics School of Louvain at UCLouvain in Belgium.

This paper examines competition between two-sided platforms that strategically commit to offering free access to one side of the market. Contrary to standard wisdom, commitment may target the group with weaker cross-side network effects.

This move, when adopted by competitors, relaxes price competition on the paying side, potentially raising platform profits. We derive equilibrium strategies and conditions under which commitment emerges, connecting our findings to the broader literature on platform pricing and market structure.

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