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Two-Sided Market with Spillover - Modeling a City

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  • Shchetinin, Oleg

Abstract

The paper explores the analogy between city and two-sided market. It generalizes the results on the pricing strategies of the platform in the two-sided markets for the case when concentration spillover plays an important role. The two-sided market framework is applied to model a city. The paper highlights the importance of the network effect and labor market structure for city size, governance and agglomeration formation. The cases of an isolated city and competing cities are considered.

Suggested Citation

  • Shchetinin, Oleg, 2009. "Two-Sided Market with Spillover - Modeling a City," MPRA Paper 15428, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15428
    as

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    File URL: https://mpra.ub.uni-muenchen.de/15428/1/MPRA_paper_15428.pdf
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    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    3. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    4. Henderson, Vernon, 1997. "Medium size cities," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 583-612, November.
    5. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
    6. Boyan Jovanovic & Rafael Rob, 1989. "The Growth and Diffusion of Knowledge," Review of Economic Studies, Oxford University Press, vol. 56(4), pages 569-582.
    7. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    8. Imai, Haruo, 1982. "CBD hypothesis and economies of agglomeration," Journal of Economic Theory, Elsevier, vol. 28(2), pages 275-299, December.
    9. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    10. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
    11. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier.
    12. Henderson, Vernon & Becker, Randy, 2000. "Political Economy of City Sizes and Formation," Journal of Urban Economics, Elsevier, vol. 48(3), pages 453-484, November.
    13. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Two-sided markets; Industrial organization; Urban economics; Concentration spillover; City; Labor matching market;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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