Platform break-even market share

Daniel Arce

Marketing Letters, 2023, vol. 34, issue 4, No 12, 713-725

Abstract: Abstract This study characterizes break-even market share within the context of two-sided platform markets. It combines chicken-and-egg pricing with previously unexplored network-based measures of total addressable market and serviceable available market. In addition, it accounts for the density of transactions across a platform’s network. A network-based driver of market share is how the number of users on each side translates into the platform’s addressable market. A two-sided market-based driver is how fixed costs are spread over the total value of the indirect externality created on the platform’s subsidized side. For marketing managers, these and other facets matter for identifying how large a network-based platform need be to capture significant market value, which is a necessary datum for attracting internal or external financing; calculating break-even volume and market share for potential entrants; and forecasting whether the market is winner-take-all based on transaction density.

Keywords: Platform economics; Two-sided markets; Break-even analysis; Market share; Indirect externalities; Winner-take-all; Transaction density (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11002-023-09674-7 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:mktlet:v:34:y:2023:i:4:d:10.1007_s11002-023-09674-7

Ordering information: This journal article can be ordered from
http://www.springer. ... etailsPage=societies

DOI: 10.1007/s11002-023-09674-7

Access Statistics for this article

Marketing Letters is currently edited by Joel Steckel and Peter Golder

More articles in Marketing Letters from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).