Platform models and strategic interaction on a multi-agent transport network

Strategic price interaction on networks with rival and interchangeable services are well-known to produce damaging externalities with which the number of agents acting independently can interact in non-linear ways. We examine how varying the number of independent agents can impact the relative performance of platform models on a transport network whose design can mitigate some of the damaging externalities in the 2-agent setting. We show that increasing the number of agents can preserve or enhance some of the benefits of the platform models under some circumstances but the platform structure, that abates damaging externalities with 2-agents, can constrain beneficial competitive forces with more agents, damaging relative performance.