Network Competition: Asymetric Information, Technology Inovation And Multi-Services

This paper mainly discusses the competition between two cybermediaries in the two-sided market. Because of the externality of the network, the utilities of the consumers on one side will be affected by the number of the consumers that register to the same cybermediary on the other side. Just as the same in the real world, in some cases consumers can register to different cybermediaries, but in other cases consumers can only register to one cybermediary. All these cybermediaries can make profit by charging the registration fee or transaction fee. In this paper, I assume that when a successful match takes place, there is asymmetric information about the consumers' surplus between the cybermediaries and consumers. I discuss the equilibriums in technology innovation and multi-services, which include dominant firm equilibriums and multi-homing equilibriums.