Two-sided markets: A progress report

Jean Charles Rochet*, Jean Tirole

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1270 Scopus citations

Abstract

We provide a road map to the burgeoning literature on two-sided markets and present new results. We identify two-sided markets with markets in which the structure, and not only the level of prices charged by platforms, matters. The failure of the Coase theorem is necessary but not sufficient for two-sidedness. We build a model integrating usage and membership externalities that unifies two hitherto disparate strands of the literature emphasizing either form of externality, and obtain new results on the mix of membership and usage charges when price setting or bargaining determine payments between end-users.

Original languageEnglish (US)
Pages (from-to)645-667
Number of pages23
JournalRAND Journal of Economics
Volume37
Issue number3
DOIs
StatePublished - 2006
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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