Armstrong, M. (2006) Competition in two-sided markets. The RAND Journal of Economics , 37 (3) pp. 668-691.
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Many 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 where agents join a single platform; and a model of "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.
|Title:||Competition in two-sided markets|
|Open access status:||An open access version is available from UCL Discovery|
|Additional information:||Please also see http://eprints.ucl.ac.uk/14583 for a related item|
|Keywords:||JEL classification: D40, D62, D85, L11, L14. Competition, equilibrium|
|UCL classification:||UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics|
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