Competition in Two-Sided Markets
AbstractMany markets involve two groups of agents who interact via "platforms," where one group's benefit from joining a platform depends on the size of the other group that joins the platform. I present three models of such markets: a monopoly platform; a model of competing platforms "competitive bottlenecks" where one group joins all platforms.The determinants of equilibrium prices are (i) the magnitude of the cross group externalities, (ii) whether fees are levied on a lump-sum or per-transaction basis, and (iii) whether agents join one platform or several platforms.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 37 (2006)
Issue (Month): 3 (Autumn)
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Other versions of this item:
- Mark Armstrong, 2005. "Competition in Two-Sided Markets," Industrial Organization 0505009, EconWPA.
- Armstrong, M., 2006. "Competition in two-sided markets," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
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- Two-sided market in Wikipedia (English)
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