In a logit model of N competing platforms with an outside option, small cross-side externalities make collusion reduce participation and raise prices on both sides, while raising the outside option or adding competitors can either raise or lower prices depending on user heterogeneity.
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Competition and Collusion in Two-Sided Markets with an Outside Option
In a logit model of N competing platforms with an outside option, small cross-side externalities make collusion reduce participation and raise prices on both sides, while raising the outside option or adding competitors can either raise or lower prices depending on user heterogeneity.