Platform Competition in Two-Sided Markets

Jean Rochet and Jean Tirole

No 152, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse

Abstract: Many if not most markets with network externalities are two-sided. To succeed, platforms in industries such as software, portals and media, payment systems and the Internet, must "get both sides of the market on board ". Accordingly, platforms devote much attention to their business model, that is to how they court each side while making money overall. The paper builds a model of platform competition with two-sided markets. It unveils the determinants of price allocation and enduser surplus for different governance structures (profit-maximizing platforms and not-for-profit joint undertakings), and compares the outcomes with those under an integrated monopolist and a Ramsey planner.

Date: 2003
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Citations: View citations in EconPapers (1445)

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http://idei.fr/sites/default/files/medias/doc/wp/2002/platformnov26_abs.pdf Abstract (application/pdf)

Related works:
Journal Article: Platform Competition in Two-Sided Markets (2003)
Working Paper: Platform competition in two sided markets (2002)
Working Paper: Platform Competition in Two Sided Markets (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ide:wpaper:654

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