Platform competition in two-sided markets

Jean Charles Rochet, Jean Marcal Pierre Tirole

    Research output: Contribution to journalReview articlepeer-review

    5 Scopus citations

    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 This 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.

    Original languageEnglish (US)
    Pages (from-to)180-218
    Number of pages39
    JournalCompetition Policy International
    Volume10
    Issue number2
    StatePublished - Sep 1 2014

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Political Science and International Relations
    • Law

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