Seminario When Do Platform Mergers Benefit Users? The Role of Multihoming, Network Effects and Post-Merger Strategies

This paper examines mergers in a setting where two differentiated platforms connect users and remain active after the merger. We highlight the critical interplay between network effects, multihoming, and post-merger strategies. When users on both sides are single homing, mergers reduce user surplus, and network effects do not alter this conclusion. By contrast, when one side multi homes, network effects become decisive: strong network effects can flip the welfare impact from negative to positive. We further examine post-merger strategies such as integration and bundling, showing that they can reduce—or even fully eliminate—the potential welfare gains from mergers.