Rochet, Jean-Charles and Triole, Jean (2002) Platform competition in two sided markets. Discussion paper, 409. Financial Markets Group, London School of Economics and Political Science, London, UK.
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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 end-user 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.
|Item Type:||Monograph (Discussion Paper)|
|Additional Information:||© 2002 The Authors|
|Library of Congress subject classification:||H Social Sciences > HF Commerce
H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
|Sets:||Research centres and groups > Financial Markets Group (FMG)
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