Two-sided markets: A progress report

Jean Charles Rochet*, Jean Tirole

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    1087 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

    ASJC Scopus subject areas

    • Economics and Econometrics

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