Merchant or Two-Sided Platform?

Hagiu Andrei ()
Additional contact information
Hagiu Andrei: Harvard Business School

Review of Network Economics, 2007, vol. 6, issue 2, 19

Abstract: This paper provides a first pass at comparing two polar strategies for market intermediation: "merchant" mode - buying from sellers and reselling to buyers - and "two-sided platform" mode - enabling affiliated sellers to sell directly to affiliated buyers. The merchant mode is more profitable when the chicken-and-egg problem for the two-sided platform is more severe and when the degree of complementarity among sellers' products is higher. The platform mode is preferred when seller investment incentives are important or when there is asymmetric information regarding seller product quality. We discuss these tradeoffs in the context of several prominent digital intermediaries.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (61)

Downloads: (external link)
https://doi.org/10.2202/1446-9022.1113 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rneart:v:6:y:2007:i:2:n:3

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rne/html

DOI: 10.2202/1446-9022.1113

Access Statistics for this article

Review of Network Economics is currently edited by Lukasz Grzybowski

More articles in Review of Network Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().