We study price competition and entry of platforms in multi-sided markets. Utilizing the simplicity of the equilibrium pricing formula in our setting with heterogeneity of customers’ membership benefits, we demonstrate that in the presence of externalities, the standard effects of competition can be reversed: as platform competition increases, prices, and platform profits can go up and consumer surplus can go down. We identify economic forces that jointly determine the social inefficiency of the free-entry equilibrium and provide conditions under which free entry is socially excessive as well as an example in which free entry is socially insufficient.

中文翻译：

---

多边市场竞争和进入的影响

我们研究价格竞争和多边市场平台的进入。通过在我们的环境中利用均衡定价公式的简单性以及客户会籍利益的异质性，我们证明了在存在外部性的情况下，竞争的标准效果可以逆转：随着平台竞争的加剧，价格和平台利润会上升消费者剩余会减少。我们确定共同决定自由进入均衡的社会效率低下的经济力量，并提供自由进入在社会上过多的条件以及自由进入在社会上不足的示例。