Armstrong, M. (2005) Competition in two-sided markets. (ELSE Working Papers 91). ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
There are many examples of markets involving two groups of agents who need to interact via platforms, and where one groups benefit from joining a platform depends on the number of agents from the other group who join the same platform. This paper presents theoretical models for three variants of such markets: a monopoly platform; a model of competing platforms where each agent must choose to join a single platform; and a model of competing bottlenecks, where one group wishes to join all platforms. The main determinants of equilibrium prices are (i) the relative sizes of the cross-group externalities, (ii) whether fees are levied on a lump-sum or per-transaction basis, and (iii) whether a group joins just one platform or joins all platforms.
| Type: | Working / discussion paper |
|---|---|
| Title: | Competition in two-sided markets |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php |
| Language: | English |
| Additional information: | Please also see http://eprints.ucl.ac.uk/4324/ |
| UCL classification: | UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics |
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