Two-sided markets: A progress report
Abstract
We provide a roadmap to the burgeoning literature on two-sided markets and present new results. We identify two-sided markets with markets in which the structure, and not only the level of prices charged by platforms, matters. The failure of the Coase theorem is necessary but not sufficient for two-sidedness. We build a model integrating usage and membership externalities that unifies two hitherto disparate strands of the literature emphasizing either form of externality, and obtain new results on the mix of membership and usage charges when price setting or bargaining determine payments between end-users.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
Digital platforms function as two-sided marketplaces that facilitate relationships between users who want to purchase or rent a good and actors able to fulfill that demand by selling or lending through the platform.
“Essentially, they function as two-sided marketplaces that facilitate the relationship between users who want to purchase (or rent) a good and actors able to fulfill that demand by selling or lending that good through the platform (Rochet & Tirole, 2006).”
From Governance and control in distributed ledgers: Understanding the challenges facing blockchain technology in financial services (2019) · cites this paper as Rochet & Tirole, 2006
Cites
Coase, R. H. (1960) · The Journal of Law and Economics · doi:10.1086/466560 · Cited by 18,255 · see citing works
Network externalities, competition, and compatibility
Katz, M. L. (1985) · American Economic Review · Cited by 6,152 · see citing works
Platform Competition in Two-Sided Markets
Rochet, J.-C., & Tirole, J. (2003) · Journal of the European Economic Association · doi:10.1162/154247603322493212 · Cited by 5,642 · see citing works
Self-citationCompetition in two-sided markets
Armstrong, M. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00037.x · Cited by 3,315 · see citing works
Standardization, Compatibility, and Innovation
Farrell, J., & Saloner, G. (1985) · The RAND Journal of Economics · doi:10.2307/2555589 · Cited by 2,659 · see citing works
Technology Adoption in the Presence of Network Externalities
Katz, M. L., & Shapiro, C. (1986) · Journal of Political Economy · doi:10.1086/261409 · Cited by 2,622 · see citing works
Efficient mechanisms for bilateral trading
Myerson, R. B., & Satterthwaite, M. A. (1983) · Journal of Economic Theory · doi:10.1016/0022-0531(83)90048-0 · Cited by 2,580 · see citing works
Chicken & Egg: Competition among Intermediation Service Providers
Caillaud, B., & Jullien, B. (2003) · The RAND Journal of Economics · doi:10.2307/1593720 · Cited by 1,799 · see citing works
Two-Sided Network Effects: A Theory of Information Product Design
PARKER, G. G., & Alstyne, M. V. (2005) · Management Science · doi:10.1287/mnsc.1050.0400 · Cited by 1,684 · see citing works
Installed base and compatibility : innovation, product preannouncements and predation
Farrell, J. P., & Saloner, G. (1986) · RePEc: Research Papers in Economics · Cited by 1,547 · see citing works
Cooperation among Competitors: Some Economics of Payment Card Associations
Rochet, J.-C., & Tirole, J. (2002) · The RAND Journal of Economics · doi:10.2307/3087474 · Cited by 659 · see citing works
Self-citationBargaining under Incomplete Information
Chatterjee, K., & Samuelson, W. F. (1983) · Operations Research · doi:10.1287/opre.31.5.835 · Cited by 646 · see citing works
Network Competition: I. Overview and Nondiscriminatory Pricing
Laffont, J., Rey, P., & Tirole, J. (1998) · The RAND Journal of Economics · doi:10.2307/2555814 · Cited by 637 · see citing works
Self-citationMarket Provision of Broadcasting: A Welfare Analysis
Anderson, S. P., & Coate, S. (2005) · The Review of Economic Studies · doi:10.1111/0034-6527.00357 · Cited by 625 · see citing works
Pricing and commitment by two-sided platforms
Hagiu, A. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00039.x · Cited by 526 · see citing works
The Antitrust Economics of Multi-Sided Platform Markets
Evans, D. S. (2003) · bepress Legal Repository · Cited by 499 · see citing works
Game-Theoretic Models of Bargaining
(1985) · Cambridge University Press eBooks · doi:10.1017/cbo9780511528309 · Cited by 497 · see citing works
Network Competition: II. Price Discrimination
Laffont, J., Rey, P., & Tirole, J. (1998) · The RAND Journal of Economics · doi:10.2307/2555815 · Cited by 487 · see citing works
Self-citationNetwork Interconnection in Telecommunications
Armstrong, M. (1998) · The Economic Journal · doi:10.1111/1468-0297.00304 · Cited by 458 · see citing works
Information and the Coase Theorem
Farrell, J. (1987) · The Journal of Economic Perspectives · doi:10.1257/jep.1.2.113 · Cited by 395 · see citing works
Tirole, J. (1986) · Journal of Political Economy · doi:10.1086/261372 · Cited by 350 · see citing works
Self-citationInfinite-horizon models of bargaining with one-sided incomplete information
Fudenberg, D., Levine, D. K., & Tirole, J. (1985) · Cambridge University Press eBooks · doi:10.1017/cbo9780511528309.006 · Cited by 341 · see citing works
Self-citationEvans, D. S., Hagiu, A., & Schmalensee, R. (2006) · The MIT Press eBooks · doi:10.7551/mitpress/3959.001.0001 · Cited by 318 · see citing works
Invisible Engines: How Software Platforms Drive Innovation and Transform Industries
Evans, D. S., Hagiu, A., & Schmalensee, R. (2006) · Project Muse (Johns Hopkins University) · Cited by 311 · see citing works
Game-Theoretic Models of Bargaining.
Cross, J. G., & Roth, A. E. (1987) · Industrial and Labor Relations Review · doi:10.2307/2523873 · Cited by 290 · see citing works
Internet Interconnection and the Off-Net-Cost Pricing Principle
Laffont, J., Marcus, S., Rey, P., & Jean Tirole, Z. (2003) · The RAND Journal of Economics · doi:10.2307/1593723 · Cited by 205 · see citing works
Wright, J. (2002) · European Economic Review · doi:10.1016/s0014-2921(02)00305-7 · Cited by 195 · see citing works
On the "Receiver-Pays" Principle
Jeon, D.-S., Laffont, J., & Tirole, J. (2004) · The RAND Journal of Economics · doi:10.2307/1593731 · Cited by 151 · see citing works
Self-citationMatching and Price Competition
Bulow, J. I., & Levin, J. (2006) · American Economic Review · doi:10.1257/aer.96.3.652 · Cited by 150 · see citing works
The Neutrality of Interchange Fees in Payment Systems
Gans, J. S., & King, S. P. (2003) · Topics in Economic Analysis & Policy · doi:10.2202/1538-0653.1069 · Cited by 147 · see citing works
Quantifying equilibrium network externalities in the ACH banking industry
Ackerberg, D. A., & Gowrisankaran, G. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00040.x · Cited by 129 · see citing works
Price discrimination and efficient matching
Damiano, E., & Li, H. (2006) · Economic Theory · doi:10.1007/s00199-005-0058-2 · Cited by 123 · see citing works
Two-sided Markets and Electronic Intermediaries
Jullien, B. (2005) · CESifo Economic Studies · doi:10.1093/cesifo/51.2-3.233 · Cited by 116 · see citing works
Tying in two-sided markets and the honor all cards rule
Rochet, J., & Tirole, J. (2008) · International Journal of Industrial Organization · doi:10.1016/j.ijindorg.2008.01.002 · Cited by 103 · see citing works
Self-citationAn Empirical Analysis of Payment Card UsagePreprint
Rysman, M. (2006) · SSRN Electronic Journal · doi:10.2139/ssrn.892591 · Cited by 97 · see citing works
Ellison, G., Fudenberg, D., & Möbius, M. (2004) · Journal of the European Economic Association · doi:10.1162/154247604323015472 · Cited by 92 · see citing works
Quantifying Equilibrium Network Externalities in the ACH Banking Industry
Ackerberg, D. A., & Gowrisankaran, G. (2006) · National Bureau of Economic Research · doi:10.3386/w12488 · Cited by 47 · see citing works
Two-Sided Markets with Negative ExternalitiesPreprint
Reisinger, M. (2004) · RePEc: Research Papers in Economics · doi:10.5282/ubm/epub.478 · Cited by 37 · see citing works
Your network or mine? The economics of routing rules
Hermalin, B. E., & Katz, M. L. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00038.x · Cited by 33 · see citing works
Two-sided network effects and competition : an application to media industriesPreprint
Gabszewicz, J. J., Ferrando, J. N., Laussel, D. G., & Sonnac, N. (2004) · RePEc: Research Papers in Economics · Cited by 32 · see citing works
A Quality-Signaling Rationale for Aftermarket TyingPreprint
Schwartz, M., & Werden, G. J. (1995) · RePEc: Research Papers in Economics · Cited by 18 · see citing works
Network Markets and Consumer CoordinationPreprint
Ambrus, A., & Argenziano, R. (2004) · SSRN Electronic Journal · doi:10.2139/ssrn.619042 · Cited by 17 · see citing works
Advertising on TV: Under- or Overprovision?Preprint
Kind, H. J., Nilssen, T., & Sørgard, L. (2005) · RePEc: Research Papers in Economics · Cited by 15 · see citing works
Design and ownership of two-sided networks: implications for Internet intermediaries
Katsamakas, E. G., & Bakos, Y. (2004) · Cited by 10 · see citing works
Price Discrimination in Matching MarketsPreprint
Damiano, E., & Li, H. (2003) · SSRN Electronic Journal · doi:10.2139/ssrn.369781 · Cited by 9 · see citing works
Mechanism Design to Promote Free Market and Open Source Software Innovation
PARKER, G. G., & Alstyne, M. V. (2005) · Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences · doi:10.1109/hicss.2005.406 · Cited by 8 · see citing works
Competing with Network Externalities and Price DiscriminationPreprint
Jullien, B. (2001) · SSRN Electronic Journal · Cited by 7 · see citing works
Flagged first, then by citations
Cited by
Sorted by citations
Competition in two-sided markets
Armstrong, M. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00037.x · Cited by 3,315 · see citing works
Bridging differing perspectives on technological platforms: Toward an integrative framework
Gawer, A. (2014) · Research Policy · doi:10.1016/j.respol.2014.03.006 · Cited by 1,869 · see citing works
The Digital Platform: A Research Agenda
de Reuver, M., Sørensen, C., & Basole, R. C. (2018) · Journal of Information Technology · doi:10.1057/s41265-016-0033-3 · Cited by 1,681 · see citing works
The Economics of Two-Sided Markets
Rysman, M. (2009) · Journal of Economic Perspectives · doi:10.1257/jep.23.3.125 · Cited by 1,261 · see citing works
Networks, platforms, and strategy: Emerging views and next steps
McIntyre, D. P., & Srinivasan, A. (2017) · Strategic Management Journal · doi:10.1002/smj.2596 · Cited by 1,109 · see citing works
Introduction—Platforms and Infrastructures in the Digital Age
Constantinides, P., Henfridsson, O., & Parker, G. G. (2018) · Information Systems Research · doi:10.1287/isre.2018.0794 · Cited by 943 · see citing works
Platform competition: Strategic trade‐offs in platform markets
Cennamo, C., & Santalo, J. (2013) · Strategic Management Journal · doi:10.1002/smj.2066 · Cited by 780 · see citing works
What is co-creation? An interactional creation framework and its implications for value creation
Ramaswamy, V., & Ozcan, K. (2018) · Journal of Business Research · doi:10.1016/j.jbusres.2017.11.027 · Cited by 735 · see citing works
Two-sided Markets, Competitive Bottlenecks and Exclusive Contracts
Armstrong, M., & Wright, J. (2007) · Economic Theory · doi:10.1007/s00199-006-0114-6 · Cited by 690 · see citing works
Architectural Leverage: Putting Platforms in Context
Thomas, L. D. W., Autio, E., & Gann, D. M. (2014) · Academy of Management Perspectives · doi:10.5465/amp.2011.0105 · Cited by 639 · see citing works
Digital platforms’ boundaries: The interplay of firm scope, platform sides, and digital interfaces
Gawer, A. (2021) · Long Range Planning · doi:10.1016/j.lrp.2020.102045 · Cited by 626 · see citing works
Pricing and commitment by two-sided platforms
Hagiu, A. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00039.x · Cited by 526 · see citing works
The Role of Artificial Intelligence and Data Network Effects for Creating User Value
Gregory, R. W., Henfridsson, O., Kaganer, E., & Kyriakou, H. (2021) · Academy of Management Review · doi:10.5465/amr.2019.0178 · Cited by 540 · see citing works
Ecosystems: broadening the locus of value creation
Kapoor, R. (2018) · Journal of Organization Design · doi:10.1186/s41469-018-0035-4 · Cited by 504 · see citing works
Generativity Tension and Value Creation in Platform Ecosystems
Cennamo, C., & Santaló, J. (2019) · Organization Science · doi:10.1287/orsc.2018.1270 · Cited by 408 · see citing works
A two-sided, empirical model of television advertising and viewing markets
Wilbur, K. C. (2008) · Marketing Science · doi:10.1287/mksc.1070.0303 · Cited by 342 · see citing works
Zachariadis, M., Hileman, G., & Scott, S. V. (2019) · Information and Organization · doi:10.1016/j.infoandorg.2019.03.001 · Cited by 324 · see citing works
Platform Performance Investment in the Presence of Network Externalities
Anderson, E. G., Parker, G. G., & Tan, B. (2014) · Information Systems Research · doi:10.1287/isre.2013.0505 · Cited by 326 · see citing works
Google, Facebook, Amazon, eBay: Is the Internet driving competition or market monopolization?
Haucap, J., & Heimeshoff, U. (2014) · International Economics and Economic Policy · doi:10.1007/s10368-013-0247-6 · Cited by 302 · see citing works
Song, P., Xue, L., Rai, A., & Zhang, C. (2018) · MIS Quarterly · doi:10.25300/misq/2018/13737 · Cited by 273 · see citing works
Decentralized blockchain-based electronic marketplaces
Subramanian, H. (2017) · Communications of the ACM · doi:10.1145/3158333 · Cited by 264 · see citing works
Liminal movement by digital platform‐based sharing economy ventures: The case of Uber Technologies
Garud, R., Kumaraswamy, A., Roberts, A., & Xu, L. (2022) · Strategic Management Journal · doi:10.1002/smj.3148 · Cited by 274 · see citing works
Design and Ownership of Two-Sided Networks: Implications for Internet Platforms
Bakos, Y., & Katsamakas, E. (2008) · Journal of Management Information Systems · doi:10.2753/mis0742-1222250208 · Cited by 235 · see citing works
Disruption in Platform‐Based Ecosystems
Ozalp, H., Cennamo, C., & Gawer, A. (2018) · Journal of Management Studies · doi:10.1111/joms.12351 · Cited by 223 · see citing works
Jacobides, M. G., Cennamo, C., & Gawer, A. (2024) · Research Policy · doi:10.1016/j.respol.2023.104906 · Cited by 220 · see citing works
Dreyer, B., Lüdeke-Freund, F., Hamann, R., & Faccer, K. (2017) · Technological Forecasting and Social Change · doi:10.1016/j.techfore.2017.03.036 · Cited by 201 · see citing works
NEGATIVE INTRA‐GROUP EXTERNALITIES IN TWO‐SIDED MARKETS*
Belleflamme, P., & Toulemonde, E. (2009) · International Economic Review · doi:10.1111/j.1468-2354.2008.00529.x · Cited by 119 · see citing works
Managing competition on a two‐sided platform
Belleflamme, P., & Peitz, M. (2019) · Journal of Economics & Management Strategy · doi:10.1111/jems.12311 · Cited by 109 · see citing works
Trabucchi, D., & Buganza, T. (2022) · European Journal of Innovation Management · doi:10.1108/ejim-11-2020-0467 · Cited by 83 · see citing works
Tokenomics: Dynamic adoption and valuation
Cong, L. W., Li, Y., & Wang, N. (2021) · The Review of Financial Studies · doi:10.1093/rfs/hhaa089 · Cited by 58 · see citing works
Weber, S. (2017) · Business and Politics · doi:10.1017/bap.2017.3 · Cited by 46 · see citing works
Reputation Burning: Analyzing the Impact of Brand Sponsorship on Social Influencers
Cheng, M. (., & Zhang, S. (2025) · Management Science · doi:10.1287/mnsc.2023.00193 · Cited by 43 · see citing works
Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems
Nerbel, J. F., & Kreutzer, M. (2023) · Electronic Markets · doi:10.1007/s12525-023-00625-8 · Cited by 37 · see citing works
Botta, M., & Wiedemann, K. (2020) · European Journal of Law and Economics · doi:10.1007/s10657-019-09636-3 · Cited by 35 · see citing works
Gastaldi, L., Appio, F. P., Trabucchi, D., Buganza, T., & Corso, M. (2024) · Information Systems Journal · doi:10.1111/isj.12491 · Cited by 32 · see citing works
Platform Compatibility and Developer Multihoming: A Trade-off Perspective
Tian, J., Zhao, X., & Xue, L. (2022) · MIS Quarterly · doi:10.25300/misq/2022/16369 · Cited by 26 · see citing works
Autio, E., & Thomas, L. D. W. (2018) · Academy of Management Proceedings · doi:10.5465/ambpp.2018.15913abstract · Cited by 28 · see citing works
Architectural Convergence and Platform Evolution: Empirical Test of Complementor Moves in Videogames
Srinivasan, A., & Venkatraman, V. N. (2020) · IEEE Transactions on Engineering Management · doi:10.1109/tem.2018.2881560 · Cited by 26 · see citing works
The Effect of Professional Football Clubs' Legal Structure on Sponsoring Revenue
Dietl, H. M., & Weingaertner, C. (2014) · doi:10.2139/ssrn.2493130 · Cited by 14 · see citing works
The valorization of interactions. Gift exchange, power and value creation on digital platforms
Nachtwey, O., & Schaupp, S. (2024) · Big Data & Society · doi:10.1177/20539517241259639 · Cited by 5 · see citing works
- Authors
- Rochet, J.-C., & Tirole, J.
- Affiliations
- Université de Toulouse (FR)
- ORCID
- Rochet, Jean-Charles
- Venue
- The RAND Journal of Economics
- Publisher
- Wiley
- Published
- 2006-09
- Volume
- 37
- Issue
- 3
- Pages
- 645-667
- ISSN
- 0741-6261 (ISSN-L)
- 1756-2171
- OpenAlex
- W2129998937
- Cited by
- 2,994
- References
- 47
- Citations by year
- 2026: 125 · 2025: 159 · 2024: 155 · 2023: 204 · 2022: 214 · 2021: 187 · 2020: 230 · 2019: 206 · 2018: 218 · 2017: 138 · 2016: 140 · 2015: 142 · 2014: 138 · 2013: 132 · 2012: 128
- FWCI
- 247.58
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The RAND Journal of Economics (publishedVersion)
- HAL (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Game Theory and Voting Systems
- Keywords
- two-sided markets, platform pricing, Coase theorem, membership fees, user fees, bargaining, price setting
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
