Asymmetric Networks in Two-Sided Markets
AbstractThis paper investigates pricing decisions and network choices in two-sided markets with network externalities. Consumers are heterogeneous in how much they value the externality. Imposing restrictions on the extent of coordination failure among consumers generates clear qualitative conclusions about equilibrium market configurations. Multiple asymmetric networks can coexist in equilibrium, both in the case of a monopolist network provider and in the case of competing providers. These equilibria have the property that one network is cheaper and larger on one side, while the other network is cheaper and larger on the other side. Product differentiation is endogenized by consumers' network choices.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3204916.
Date of creation: 2009
Date of revision:
Publication status: Published in American Economic Journal: Microeconomics
Other versions of this item:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ettore Damiano & Hao Li, 2007.
"Price discrimination and efficient matching,"
Springer, vol. 30(2), pages 243-263, February.
- Ettore Damiano & Li Hao, 2008.
Journal of the European Economic Association,
MIT Press, vol. 6(4), pages 789-818, 06.
- Nicholas Economides & Andrzej Skrzypacz, 2004. "Standards Coalitions Formation and Market Structure in Network Industries," Microeconomics 0407008, EconWPA.
- Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
- Mueller, Christopher & Boehme, Enrico, 2011. "The monopoly benchmark on two-sided markets," MPRA Paper 34987, University Library of Munich, Germany.
- Igal Hendel & Aviv Nevo & François Ortalo-Magné, 2007.
"The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com,"
NBER Working Papers
13360, National Bureau of Economic Research, Inc.
- Igal Hendel & Aviv Nevo & François Ortalo-Magné, 2009. "The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com," American Economic Review, American Economic Association, vol. 99(5), pages 1878-98, December.
- Francois Ortalo-Magne & Aviv Nevo & Igal Hendel, 2007. "The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com," 2007 Meeting Papers 89, Society for Economic Dynamics.
- Jullien, Bruno & Pavan, Alessandro, 2013. "Platform Pricing under Dispersed Information," TSE Working Papers 13-429, Toulouse School of Economics (TSE).
- Weinstein, Jonathan & Ambrus, Attila, 2008. "Price Dispersion and Loss Leaders," Scholarly Articles 4685158, Harvard University Department of Economics.
- Chen, Kong-Pin & Yen-Chi, Huang, 2009.
"A search-matching model of the buyer-seller platforms,"
38372, University Library of Munich, Germany, revised 14 Dec 2011.
- Kong-Pin Chen & Yen-Chi Huang, 2012. "A Search-Matching Model of the Buyer--Seller Platforms," CESifo Economic Studies, CESifo, vol. 58(4), pages 626-649, December.
- Banerji, A & Dutta, Bhaskar, 2005.
"Local Network Externalities and Market Segmentation,"
The Warwick Economics Research Paper Series (TWERPS)
725, University of Warwick, Department of Economics.
- Banerji, A. & Dutta, Bhaskar, 2009. "Local network externalities and market segmentation," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 605-614, September.
- A. Banerji & Bhaskar Dutta, 2008. "Local network externalities and market segmentation," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-13, Indian Statistical Institute, New Delhi, India.
- Noemí Navarro, 2012.
"Price and quality decisions under network effects,"
Cahiers de recherche
12-01, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
- Jullien, Bruno & Pavan, Alessandro, 2013. "Platform Pricing under Dispersed Information," IDEI Working Papers 793, Institut d'Économie Industrielle (IDEI), Toulouse.
- Reisinger, Markus, 2010. "Unique Equilibrium in Two-Part Tariff Competition between Two-Sided Platforms," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 308, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Renato Gomes & Alessandro Pavan, 2013. "Cross-Subsidization and Matching Design," Discussion Papers 1559, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Michael Vogelsang, 2010. "Dynamics of two-sided internet markets," International Economics and Economic Policy, Springer, vol. 7(1), pages 129-145, May.
- Weyl, E. Glen, 2008. "Monopolies in Two-Sided Markets: Comparative Statics and Identification," Department of Economics, Working Paper Series qt69c9c56z, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Reinhard Engels).
If references are entirely missing, you can add them using this form.