Network Goods, Price Discrimination, and Two-sided Platforms

Paul Belleflamme and Martin Peitz

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: A monopolist selling a network good to heterogeneous users is shown to become a twosided platform if it can condition prices on some user characteristics or if it cannot but induces user self-selection by offering screening contracts. This shows that the availability of sophisticated pricing instruments is essential to make a platform two-sided, not the ability to distinguish separate user groups. The use of freemium strategies (which consists of offering a base version at zero price and a premium version at a positive price) emerges as a special case of versioning.

Keywords: Network goods; two-sided platforms; platform pricing; group pricing; versioning; freemium (search for similar items in EconPapers)
JEL-codes: D21 D42 L12 L14 (search for similar items in EconPapers)
Pages: 30
Date: 2023-03
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic, nep-pay and nep-reg
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Citations: View citations in EconPapers (1)

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Working Paper: Network goods, price discrimination, and two-sided platforms (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_188v2

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