Two-sided markets, pricing, and network effects

Bruno Jullien*, Alessandro Pavan, Marc Rysman

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter

20 Scopus citations

Abstract

The chapter has ten sections, which cover the theory of two-sided markets and related empirical work. Section 1 introduces the reader to the literature. Section 2 covers the case of markets dominated by a single monopolistic firm. Section 3 discusses the theoretical literature on competition for the market, focusing on pricing strategies that firms may follow to prevent entry. Section 4 discusses pricing in markets in which multiple platforms are active and serve both sides. Section 5 presents alternative models of platform competition. Section 6 discusses richer matching protocols whereby platforms price-discriminate by granting access only to a subset of the participating agents from the other side and discusses the related literature on matching design. Section 7 discusses identification in empirical work. Section 8 presents approaches to estimation. Section 9 discusses estimation in empirical work. Finally, Section 10 concludes.

Original languageEnglish (US)
Title of host publicationHandbook of Industrial Organization, Volume 4
EditorsKate Ho
PublisherElsevier B.V.
Pages485-592
Number of pages108
Edition1
ISBN (Print)9780323915137
DOIs
StatePublished - Jan 2021

Publication series

NameHandbook of Industrial Organization
Number1
Volume4
ISSN (Print)1573-448X

Keywords

  • Matching
  • Network effects
  • Platform
  • Pricing
  • Two-sided market

ASJC Scopus subject areas

  • Industrial relations
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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