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Competition Among Digital Platforms through Pricing Strategies: A Comparative and Theoretical Analysis
Corresponding Author(s) : Djalilova Dilnoza Raxmatovna
American Journal of Economics and Business Management,
Vol. 8 No. 6 (2025): June
Abstract
The expansion of digital platforms has introduced new dynamics in market competition, particularly through the strategic use of pricing. This paper investigates how leading platforms like Amazon, Uber, and Spotify deploy pricing models to gain a competitive advantage, with a focus on multimarket contact (MMC) and cross-market externalities. Drawing on theoretical frameworks and empirical studies, the analysis distinguishes between unilateral and bilateral pricing regimes and examines how these influence user surplus, platform profits, and market equilibrium. Findings suggest that MMC intensifies buyer-side price competition but has variable impacts on seller pricing and platform profitability depending on externality structures. The study informs antitrust regulation by illustrating how data‐driven strategies and self‐preferencing can entrench dominance.
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- [1] M. Armstrong, “Competition in Two-Sided Markets,” RAND Journal of Economics, vol. 37, no. 3, pp. 668–691, 2006.
- [2] P. Belleflamme and M. Peitz, The Economics of Platforms. Cambridge: Cambridge University Press, 2019.
- [3] M. Bisceglia and J. Tirole, “Fair gatekeeping in digital ecosystems,” Toulouse School of Economics Working Paper, no. 1452, 2023.
- [4] L. Cabral, “Merger policy in digital industries,” Information Economics and Policy, vol. 54, 100866, 2021.
- [5] L. Cabral, J. Haucap, G. Parker, G. Petropoulos, T. Valletti, and M. van Alstyne, The EU Digital Markets Act. Luxembourg: Publications Office of the European Union, 2021.
- [6] B. Caillaud and B. Jullien, “Chicken & Egg: Competition among Intermediation Service Providers,” RAND Journal of Economics, vol. 34, no. 2, pp. 309–328, 2003.
- [7] J. Cremer, Y.-A. de Montjoye, and H. Schweitzer, Competition Policy for the Digital Era, European Commission, 2019.
- [8] E. Darmon, T. Le Texier, Z. Li, and T. Penard, “Multimarket Contact, Cross-Market Externalities and Platform Competition,” Information Economics and Policy, vol. 71, 101133, 2025.
- [9] D. S. Evans and R. Schmalensee, “The Antitrust Analysis of Multi-Sided Platform Businesses,” 2013.
- [10] I. Graef, N. Petit, and T. Valletti, “Fairness and Contestability in Digital Markets: The Case of Self-Preferencing,” World Competition, vol. 43, no. 3, pp. 395–414, 2020.
- [11] G. Gu and F. Zhu, “Trust and disintermediation: Evidence from an online freelance marketplace,” Management Science, vol. 67, no. 2, pp. 794–807, 2021.
- [12] L. Khan, “Amazon's Antitrust Paradox,” Yale Law Journal, vol. 126, no. 3, pp. 710–805, 2017.
- [13] Z. Li and A. Agarwal, “Platform Integration and Demand Spillovers in Complementary Markets,” Management Science, vol. 63, no. 10, pp. 3438–3458, 2017.
- [14] J.-C. Rochet and J. Tirole, “Platform Competition in Two-Sided Markets,” Journal of the European Economic Association, vol. 1, no. 4, pp. 990–1029, 2003.
- [15] S. Sato, “Freemium as Optimal Menu Pricing,” International Journal of Industrial Organization, vol. 63, pp. 480–510, 2019.
- [16] J. Wright, “Nonneutral pricing and revenue management in two-sided markets,” Marketing Science, vol. 23, no. 3, pp. 4–21, 2004.
References
[1] M. Armstrong, “Competition in Two-Sided Markets,” RAND Journal of Economics, vol. 37, no. 3, pp. 668–691, 2006.
[2] P. Belleflamme and M. Peitz, The Economics of Platforms. Cambridge: Cambridge University Press, 2019.
[3] M. Bisceglia and J. Tirole, “Fair gatekeeping in digital ecosystems,” Toulouse School of Economics Working Paper, no. 1452, 2023.
[4] L. Cabral, “Merger policy in digital industries,” Information Economics and Policy, vol. 54, 100866, 2021.
[5] L. Cabral, J. Haucap, G. Parker, G. Petropoulos, T. Valletti, and M. van Alstyne, The EU Digital Markets Act. Luxembourg: Publications Office of the European Union, 2021.
[6] B. Caillaud and B. Jullien, “Chicken & Egg: Competition among Intermediation Service Providers,” RAND Journal of Economics, vol. 34, no. 2, pp. 309–328, 2003.
[7] J. Cremer, Y.-A. de Montjoye, and H. Schweitzer, Competition Policy for the Digital Era, European Commission, 2019.
[8] E. Darmon, T. Le Texier, Z. Li, and T. Penard, “Multimarket Contact, Cross-Market Externalities and Platform Competition,” Information Economics and Policy, vol. 71, 101133, 2025.
[9] D. S. Evans and R. Schmalensee, “The Antitrust Analysis of Multi-Sided Platform Businesses,” 2013.
[10] I. Graef, N. Petit, and T. Valletti, “Fairness and Contestability in Digital Markets: The Case of Self-Preferencing,” World Competition, vol. 43, no. 3, pp. 395–414, 2020.
[11] G. Gu and F. Zhu, “Trust and disintermediation: Evidence from an online freelance marketplace,” Management Science, vol. 67, no. 2, pp. 794–807, 2021.
[12] L. Khan, “Amazon's Antitrust Paradox,” Yale Law Journal, vol. 126, no. 3, pp. 710–805, 2017.
[13] Z. Li and A. Agarwal, “Platform Integration and Demand Spillovers in Complementary Markets,” Management Science, vol. 63, no. 10, pp. 3438–3458, 2017.
[14] J.-C. Rochet and J. Tirole, “Platform Competition in Two-Sided Markets,” Journal of the European Economic Association, vol. 1, no. 4, pp. 990–1029, 2003.
[15] S. Sato, “Freemium as Optimal Menu Pricing,” International Journal of Industrial Organization, vol. 63, pp. 480–510, 2019.
[16] J. Wright, “Nonneutral pricing and revenue management in two-sided markets,” Marketing Science, vol. 23, no. 3, pp. 4–21, 2004.