2003/06/01 by Jean‐Charles Rochet, Jean Triole · 3 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Business #Business Strategy and Innovation #Competition (biology) #Computer science #Corporate governance #Digital Platforms and Economics #Economics #Externality #Finance #Industrial organization #Merger and Competition Analysis #Microeconomics #Network effect #Payment #Planner #Profit (economics) #Social planner #The Internet #Two-sided market
paper · doi:10.1162/154247603322493212
openalex publication_date 2003/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/02
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.