ESSAYS ON PLATFORMS AND TWO-SIDED MARKETS  By  Mark Joseph Tremblay                A DISSERTATION  Submitted to Michigan State University in partial fulfillment of the requirements for the degree of  Economics  Doctor of Philosophy  2016 ABSTRACT  ESSAYS ON PLATFORMS AND TWO-SIDED MARKETS  By   Mark Joseph Tremblay  Platform providers connect two groups that interact through, or on, a platform. For example, Apple develops smartphones that connect consumers with app, music, and video producers. Once consumers own a smartphone they can purchase this content and use it on their phone. Other examples of platform industries are video game consoles that connect gamers with video game developers, eReaders that connect readers with book publishers, ride-sharing platforms like Uber that connect drivers with passengers, and online marketplaces that connect buyers with sellers. A critical feature of these two-sided markets is that there are indirect network externalities between the two sides of the market. In the case of smartphones, consumers benefit from greater content availability on their smartphone while content providers benefit from greater sales when there are more consumers that own smartphones. In this dissertation I develop three chapters that investigate two-sided platforms. Study of these markets is important because of their rapid rise in the economy and their unique structure. In fact, many of my results differ from those found in traditional industrial organization models that do not incorporate two-sidedness.  iii  TABLE OF CONTENTS   Foreclosure, Entry, and Competition in Platform Markets with Cloud Storage   1  Introduction           1  A Model of Dynamic Platform Competition       4   Consumers, Sellers, and the Platforms       5  Equilibrium           9   Symmetric Quality Competition      13   Asymmetric Quality Competition      15  Conclusion          18  APPENDIX          20  REFERENCES         28  Platform Competition with Endogenous Homing      31  Introduction          31  The Model          36   Platforms         36   Side 1: Consumers        37   Side 2: Firms         39  Equilibrium          40   The Allocation Equilibrium for Arbitrary Prices    41   Equilibria of the Pricing Game       45  Monopoly versus Strong Competition       51   Monopoly         52   Welfare Comparison        54  Conclusion          57 APPENDIX          60  REFERENCES         70  Vertical Relationships within Platform Marketplaces      74  Introduction          74  The Model          77   Consumers and Sellers        77   The Platform and Timing of Play      81  Equilibrium          81 Content Provided by the Platform       85 Conclusion          87 APPENDIX          89 REFERENCES         91