Optimal platform pricing with multi-sided users: A direct and indirect network approach

Mohammed Mardan and Mark J. Tremblay

European Journal of Operational Research, 2025, vol. 321, issue 2, 503-515

Abstract: We challenge the dichotomy of network effects and highlight that they are not an exogenous characteristic of networks, but endogenous to the decisions of network users. When users choose which activities to perform in a network, multi-activity users transform indirect into direct network effects and a network effectively becomes one-sided if merely multi-activity users frequent it. Our work contributes to theory by determining the underlying primitives that produce what the literature calls a two-sided market and by highlighting how the standard two-sided pricing results are indeed optimal only under very specific conditions. Our work also reveals that platform design choices that impact multi-activity, potentially to over come the chicken-and-egg problem, will also impact optimal pricing.

Keywords: One-sided markets; Two-sided markets; Multi-siding users (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221724007422
Full text for ScienceDirect subscribers only

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:eee:ejores:v:321:y:2025:i:2:p:503-515

DOI: 10.1016/j.ejor.2024.09.038

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().