Welfare Effects of Platforms’ Exclusivity Clauses

Abstract Buyers are often active on multiple digital platforms, while gatekeeper platforms can force sellers contractually to use one platform exclusively. This paper considers the welfare effects of such exclusivity clauses for buyers, and in a duopoly with seller membership fee. A setting partially multihoming buyers is compared singlehoming sellers. It shown that predominately harm total welfare. suffer if exclusive platform, benefit from under certain conditions. In an environment clauses, when strong cross-group benefits weak differentiation result fierce price competition, be welfare-enhancing.