Two-sided markets, pricing, and network effects

Bruno Jullien; Alessandro Pavan; Marc Rysman

doi:10.1016/bs.hesind.2021.11.007

Two-sided markets, pricing, and network effects

Bruno Jullien^*, Alessandro Pavan, Marc Rysman

^*Corresponding author for this work

Economics

Research output: Chapter in Book/Report/Conference proceeding › Chapter

36 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 language	English (US)
Title of host publication	Handbook of Industrial Organization, Volume 4
Editors	Kate Ho
Publisher	Elsevier B.V.
Pages	485-592
Number of pages	108
Edition	1
ISBN (Print)	9780323915137
DOIs	https://doi.org/10.1016/bs.hesind.2021.11.007
State	Published - Jan 2021

Publication series

Name	Handbook of Industrial Organization
Number	1
Volume	4
ISSN (Print)	1573-448X

Funding

For comments and suggestions, we thank the editors, anonymous referees, as well as Mark Armstrong, Jay-Pil Choi, Avi Goldfarb, Hanna Halaburda, Igal Hendel, Chuqing Jin, Marshall Van Alstyne, Shuang Wang, Stefan Weiergraeber, Julian Wright, and Junjie Zhou. Special thanks to Martin Peitz for very detailed comments. Jishan Du, Tyler Haas, and Shuang Wang provided excellent research assistance. Bruno Jullien acknowledges funding from ANR under grant ANR-17-EURE-0010 (Investissements d'Avenir program) and ANITI (ANR grant 3IA), and from the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement No 670494).

Keywords

Matching
Network effects
Platform
Pricing
Two-sided market

ASJC Scopus subject areas

Industrial relations
Finance
Economics and Econometrics
Strategy and Management

Access to Document

10.1016/bs.hesind.2021.11.007

Cite this

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KW - Pricing

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Two-sided markets, pricing, and network effects

Abstract

Publication series

Funding

Keywords

ASJC Scopus subject areas

Access to Document

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