Cited by 1,281Digital Platforms and EconomicsMerger and Competition AnalysisConsumer Market Behavior and Pricing

The DOI matches its Crossref record; 242 of the 242 references it cites were found in a registry or an index; 2 of the 18 sources its claims cite were checked for support.

The Economics of Two-Sided Markets

Open access

Rysman, Marc·2009·Journal of Economic Perspectives

DOI 10.1257/jep.23.3.125

Open this paper in CoChat — free account Open PDF

Abstract

Broadly speaking, a two-sided market is one in which 1) two sets of agents interact through an intermediary or platform, and 2) the decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality. In the case of a video game system, the intermediary is the console producer—Sony in the scenario above—while the two sets of agents are consumers and video game developers. Neither consumers nor game developers will be interested in the PlayStation if the other party is not. Similarly, a successful payment card requires both consumer usage and merchant acceptance, where both consumers and merchants value each others' participation. Many more products fit into this paradigm, such as search engines, newspapers, and almost any advertiser-supported media (examples in which consumers typically negatively value, rather than positively value, the participation of the other side), as well as most software or title-based operating systems and consumer electronics. This paper seeks to explain what two-sided markets are and why they interest economists. I discuss the strategies that firms typically consider, and I highlight a number of puzzling outcomes from the perspective of the economics of two-sided markets. Finally, I consider the implications for public policy, particularly antitrust and regulatory policy, where there have been a number of recent issues involving media, computer operating systems, and payment cards.

Integrity signals

Registry

Crossref · 10.1257/jep.23.3.125

Cites

242 of 242 references verified0 citation errors · 0 not checkable

Statistics

Nothing to recompute.

Claims the paper makes

2 of 18 cited sources checked · 1 supported · 0 flagged · accuracy not yet measured

The cited sources support only part of this claim — read each source’s verdict below.
In the paper
“In fact, two-sided markets often seem to evolve toward to a situation where members of one side use a single platform and the other side uses multiple platforms; Armstrong (2006, Section 5) makes this point and provides formal analysis.”
§ The Economics of Two-Sided Markets > Pricing
What the sources say
- Partly supported
  Section 5, “Competitive bottlenecks” (page unavailable), formally analyzes a market in which one group uses a single platform and the other uses multiple platforms. The discussion preceding Section 5 says several important markets resemble this configuration. The paper does not establish that markets evolve toward it over time. (LLM, conf=0.83)
  cites Armstrong (2006, Section 5) sourceExperimental — accuracy not yet measured
Strength:hedged· not yet calibratedCausal:correlational· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes? Load-bearing: unclear✓ Based: passes
Every source the paper cites for this claim was checked and supports it.
In the paper
“Hence, firms compete aggressively on the side that uses a single network in order to charge monopoly prices to the other side that is trying to reach them (Armstrong, 2006).”
§ The Economics of Two-Sided Markets > Pricing
What the sources say
- Supported
  In “Fixed fees or per-transaction charges” (page unavailable), Armstrong says platforms compete for single-homing agents but have monopoly power over access to them, leading to high prices for the multi-homing side. Section 5, “Competitive bottlenecks” (page unavailable), describes each platform as holding a local monopoly over that access. The claim is a fair paraphrase of this competitive-bottleneck result. (LLM, conf=0.91)
  cites Armstrong, 2006 source
Load-bearingStrength:plain· not yet calibratedCausal:direct· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes✓ Load-bearing: passes✓ Based: passes

Show all 46 claims

Probably not a substantial claim. 34
It may state two separate claims as one. 39

In the paper
“However, as Rochet and Tirole (2002) point out, if serving consumers and merchants is perfectly competitive, then the interchange fee does not affect the profits of the member banks.”
§ The Economics of Two-Sided Markets > Abstract
What the sources say
- Not checked — no full text of the sourcecites Rochet and Tirole (2002) source
Load-bearingStrength:plain· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes✓ Load-bearing: passes✓ Based: passes
Probably not a substantial claim.
In the paper
“Thus, discrimination increases the value extracted on one side, which leads to lower prices on the other side which has now become more valuable (Weyl, 2009).”
§ The Economics of Two-Sided Markets > Pricing
What the sources say
- Not checked — no full text of the sourcecites Weyl, 2009 source
Load-bearingStrength:plain· not yet calibratedCausal:direct· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes✓ Load-bearing: passes✓ Based: passes
It may state two separate claims as one.
In the paper
“If there is no antitrust violation in setting interchange fees but the equilibrium outcome diverges from the social optimum (as in Rochet and Tirole, 2002), then price regulation may be a reasonable solution.”
§ The Economics of Two-Sided Markets > Regulation
What the sources say
- Not checked — no full text of the sourcecites Rochet and Tirole, 2002 source
Load-bearingStrength:hedged· not yet calibratedCausal:conditional· not yet calibrated
Tests✓ Asserted: passes✗ Checkable: fails✓ Load-bearing: passes✓ Based: passes
Probably not a substantial claim. It may be too vague to check against evidence. It may state two separate claims as one.
In the paper
“As such, it is unlikely that the theory of two-sided markets will have much effect here, although there is some movement to make predatory pricing easier to prosecute(Brodley, Bolton, and Riordan, 2000).”
§ The Economics of Two-Sided Markets > y I thank Mark Armstrong, David Evans, Marshall Van Alstyne, Pai Ying Li, and Glen
What the sources say
- Not matched
  Couldn’t be matched to a paper in Crossref, so it can’t be checked.
  cites Brodley, Bolton, and Riordan, 2000
Strength:hedged· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes? Load-bearing: unclear✓ Based: passes
It may state two separate claims as one.
None of the sources cited for this claim have been checked yet.
In the paper
“If the sellers cannot differentiate aside from adopting a standard, they must differentiate by choosing separate standards, which leads to the adoption of multiple standards (Ellison and Fudenberg, 2003) or even adoption failure (Augereau, Greenstein, and Rysman, 2006;Kretschmer, 2008).”
§ The Economics of Two-Sided Markets > Openness
What the sources say
- Not checked — no full text of the sourcecites Ellison and Fudenberg, 2003 source
- Not matched
  Couldn’t be matched to a paper in Crossref, so it can’t be checked.
  cites Augereau, Greenstein, and Rysman, 2006;Kretschmer, 2008
Load-bearingStrength:plain· not yet calibratedCausal:direct· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes✓ Load-bearing: passes✓ Based: passes
It may state two separate claims as one.
In the paper
“For instance, cash is more costly to process than credit card payments, whereas electronic debit is cheaper (Reserve Bank of Australia, 2007).”
§ The Economics of Two-Sided Markets > Regulation
What the sources say
- Not matched
  Couldn’t be matched to a paper in Crossref, so it can’t be checked.
  cites Reserve Bank of Australia, 2007
Strength:plain· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes✗ Load-bearing: fails✓ Based: passes
Probably not a substantial claim. The paper’s conclusions may not depend on it. It may state two separate claims as one.
In the paper
“Knittel and Stango (2008) argue that deregulating surcharges for ATMs had a major role in causing the expansion.”
§ The Economics of Two-Sided Markets > Regulation
What the sources say
- Not checked — no full text of the sourcecites Knittel and Stango (2008) source
Strength:plain· not yet calibratedCausal:direct· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes✗ Load-bearing: fails✓ Based: passes
Probably not a substantial claim. The paper’s conclusions may not depend on it.
A conclusion the paper draws from its own results — it cites no other source for it, so there is none to check. The quote shows it is in the paper.
In the paper
“Hence, fees were deregulated in this market, in contrast with the current trend toward regulation in payment cards.”
§ The Economics of Two-Sided Markets > Regulation
Strength:plain· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes? Load-bearing: unclear✓ Based: passes
It may state two separate claims as one.
- Rests on an assumption: Increased prices led to more consumer usage rather than less because ATMs were much more conveniently located.
A conclusion the paper draws from its own results — it cites no other source for it, so there is none to check. The quote shows it is in the paper.
In the paper
“That is, determining the difference between optimal and equilibrium prices has little role in establishing the legality of an action in a monopolization case (although it may have an important role in determining the requisite question of whether a firm has market power).”
§ The Economics of Two-Sided Markets > Antitrust
Strength:plain· not yet calibrated
Tests✓ Asserted: passes✓ Checkable: passes? Load-bearing: unclear✓ Based: passes
It may state two separate claims as one.
- Rests on an assumption: Inefficient pricing is not an antitrust violation by itself.
- Rests on an assumption: Monopolization and vertical contracting cases typically hinge on whether a firm has excluded competitors from the market in a way that did not benefit consumers or reduce costs.
In the paper
“The court deemed that system unworkable, and hence the collectively set interchange fee was legal as it was necessary to provide the Visa card.”
§ The Economics of Two-Sided Markets > Antitrust
What the sources say
- Not matched
  Couldn’t be matched to a paper in Crossref, so it can’t be checked.
  cites National Bancard Corp.(Nabanco) v. Visa U.S.A., Inc. (779 F.2d 592 [11 th Cir.1986])
Strength:plain· not yet calibratedCausal:direct· not yet calibratedSingle case
Tests✓ Asserted: passes✓ Checkable: passes? Load-bearing: unclear✓ Based: passes
It may state two separate claims as one.

56 of 56

The paper relies on this without support.
Two-sidedness may exist in practically all markets.
“That is, although two-sidedness may exist in practically all markets, it is not always quantitatively important.”
The paper relies on this without support.
The difference in industries between the two-sided markets literature and the network effects literature is not crucial.
“However, the difference in industries is not crucial, and there are exceptions on both sides.”
The paper relies on this without support.
The two-sided markets literature and the network effects literature have a lot in common.
“Many papers that study operating systems identify themselves with network effects rather than two-sided markets so perhaps this example is less canonical, but as I have argued, the two literatures have a lot in common.”
The paper relies on this without support.
Antitrust authorities typically use the size of cross-price elasticities to determine what products should be included in a relevant market.
“Antitrust authorities typically use the size of cross-price elasticities to determine what products should be included in a relevant market.”
The paper relies on this without support.
Inefficient pricing is not an antitrust violation by itself.
“Although inefficient pricing is the hallmark of the economic criticism of monopoly power, inefficient pricing is not an antitrust violation by itself.”
The paper relies on this without support.
Monopolization and vertical contracting cases typically hinge on whether a firm has excluded competitors from the market in a way that did not benefit consumers or reduce costs.
“Monopolization and vertical contracting cases typically hinge on whether a firm has excluded competitors from the market in a way that did not benefit consumers or reduce costs.”
The paper relies on this without support.
In December 2007, the European Commission ruled that the interchange fee at MasterCard for cross-border transactions is collusive and illegal.
“In December 2007, the European Commission ruled that the interchange fee at MasterCard (for crossborder transaction) is collusive and illegal.”
The paper relies on this without support.
MasterCard can exist with a zero-interchange fee.
“Since MasterCard can exist with a zero-interchange fee, the exemption to the joint behavior was eliminated.”
The paper relies on this without support.
Increased prices led to more consumer usage rather than less because ATMs were much more conveniently located.
“Furthermore, increased prices led to more consumer usage rather than less because ATMs were much more conveniently located.”

9 of 9

Self-check

Percentages, sums and reported differences re-computed from the paper’s own numbers.

Each contradiction between two passages listed here was confirmed by an independent check.

Conflicting RAND journal volumes for the same 2006 issue
Minor
The references assign volume 37, issue 3 and volume 35, issue 3 of The RAND Journal of Economics to 2006. Both cannot identify that journal's third issue in the same year.

1 of 1

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
Competition and Innovation: An Inverted-U Relationship*
Aghion, P., Bloom, N., Blundell, R. W., Griffith, R., & Howitt, P. W. (2005) · The Quarterly Journal of Economics · doi:10.1093/qje/120.2.701 · Cited by 3,769
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
Two-sided markets: A progress report
Rochet, J.-C., & Tirole, J. (2006) · The RAND Journal of Economics · doi:10.1111/j.1756-2171.2006.tb00036.x · Cited by 2,994
Competition and innovation: an inverted U relationship
Aghion, P., Bloom, N., Blundell, R. W., Griffith, R., & Howitt, P. W. (2017) · doi:10.1920/wp.ifs.2002.0204 · Cited by 2,113
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
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
Competition and Innovation: An Inverted-U Relationship*
Aghion, P., Bloom, N., Blundell, R., Griffith, R., & Howitt, P. (2005) · Quarterly Journal of Economics · doi:10.1162/0033553053970214 · Cited by 995
Open Platform Strategies and Innovation: Granting Access vs. Devolving Control
Boudreau, K. J. (2010) · Management Science · doi:10.1287/mnsc.1100.1215 · Cited by 984
Journal of the European Economic Association
European Economic Association (2017) · Journal of the European Economic Association · doi:10.1111/(issn)1542-4774 · Cited by 859

Flagged first, then by citations

Show all 71 references

Research works printed but not linked: 5

Boudreau Kevin, 2007, MIT Sloan Research Paper, 4611
Brodley Joseph F, 2000, Georgetown Law Journal, 88, 2239
Ellison Glenn, 2009, Econometrica, 77, 427
Evans David S, 2003, Yale Journal on Regulation, 20, 325
Rysman Marc, 2007, Competition Policy International, 3, 197

Sorted by citations

The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry
Zervas, G., Proserpio, D., & Byers, J. W. (2017) · Journal of Marketing Research · doi:10.1509/jmr.15.0204 · Cited by 2,376
“theory of two-sided markets, for example through structural models that establish theories of price structure and usage (Rochet and Tirole, 2003; Rysman, 2009; Weyl, 2010), and models which connect innovations in product design to network effects (Parker and Van Alstyne, 2005).”
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
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
Open Platform Strategies and Innovation: Granting Access vs. Devolving Control
Boudreau, K. J. (2010) · Management Science · doi:10.1287/mnsc.1100.1215 · Cited by 984
Multi-Sided Platforms
Hagiu, A., & Wright, J. (2015) · International Journal of Industrial Organization · doi:10.1016/j.ijindorg.2015.03.003 · Cited by 1,152
“Both approaches have limitations (see Rysman, 2009).”
Influential
A Price Theory of Multi-Sided Platforms
Weyl, E. G. (2010) · American Economic Review · doi:10.1257/aer.100.4.1642 · Cited by 741
“By E. GLEN WEYL∗ Draft: October 6, 2009 I develop a general theory of monopoly pricing of networks.”
Background
Marketplace or Reseller?
Hagiu, A., & Wright, J. (2014) · Management Science · doi:10.1287/mnsc.2014.2042 · Cited by 786
“According to some existing deﬁnitions, grocery stores are examples of multi-sided platforms even though many economists think they are not (e.g. Rochet and Tirole 2006, and Rysman 2009).”
Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software App Developers and Patterns of Innovation
Boudreau, K. J. (2012) · Organization Science · doi:10.1287/orsc.1110.0678 · Cited by 676
“…that that we might begin to understand innovation incentives by likening groups of applications producers on a platform to markets of competing innovators, in which case varying intensity of competition and rivalry should shape innovation incentives (Parker and Van Alstyne 2008, Rysman 2009).”
Platform Ecosystems: How Developers Invert the Firm
PARKER, G. G., Alstyne, M. V., & Jiang, X. (2016) · MIS Quarterly · doi:10.25300/misq/2017/41.1.13 · Cited by 799
“…literature conceives of platforms as mediating markets with network externalities that cross distinct user groups and shows how subsidies to one group become optimal (Caillaud and Jullien 2003; Eisenmann et al. 2006; Parker and Van Alstyne 2000a, 2000b, 2005; Rochet and Tirole 2003; Rysman 2009).”
Markets: The Credit Rating Agencies
White, L. J. (2010) · The Journal of Economic Perspectives · doi:10.1257/jep.24.2.211 · Cited by 633
“Fourth, the bond rating business, like many information industries, involves a “two-sided market,” where payments can come from one or both sides of the market (as discussed in this journal by Rysman, 2009).”
BigTech and the changing structure of financial intermediation
Frost, J., Gambacorta, L., Huang, Y., Shin, H. S., & Zbinden, P. (2019) · Economic Policy · doi:10.1093/epolic/eiaa003 · Cited by 600
“For example, BigTech firms could exploit network externalities resulting in the creation of seemingly impenetrable barriers to market entry even by innovative companies (Rysman, 2009).”
Global platforms and ecosystems: Implications for international business theories
Nambisan, S., Zahra, S. A., & Luo, Y. (2019) · Journal of International Business Studies · doi:10.1057/s41267-019-00262-4 · Cited by 587
Platform Ecosystems: Aligning Architecture, Governance, and Strategy
Tiwana, A. (2013) · Cited by 563
The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel IndustryPreprint
Zervas, G., Proserpio, D., & Byers, J. (2013) · SSRN Electronic Journal · doi:10.2139/ssrn.2366898 · Cited by 563
Ridesourcing systems: A framework and review
Wang, H., & Yang, H. (2019) · Transportation Research Part B Methodological · doi:10.1016/j.trb.2019.07.009 · Cited by 542
Platform Competition: A Systematic and Interdisciplinary Review of the Literature
Rietveld, J., & Schilling, M. A. (2020) · Journal of Management · doi:10.1177/0149206320969791 · Cited by 577
“In many platform ecosystems, there are “chicken-and-egg” problems that have to be overcome for the platform to thrive (Caillaud & Jullien, 2003; Rochet & Tirole, 2003; Rysman, 2009).”
Value Creation through Novel Resource Configurations in a Digitally Enabled World
Amit, R. H., & Han, X. (2017) · Strategic Entrepreneurship Journal · doi:10.1002/sej.1256 · Cited by 524
“Prototype C illustrates the resource con ﬁ guration in a ﬁ rm-enabled two-sided market, which has been increasingly adopted by ﬁ rms in the digital age (Eisenmann, Parker, & Van Alstyne, 2006; Rysman, 2009).”
Background
Responses to Entry in Multi-Sided Markets: The Impact of Craigslist on Local Newspapers
Seamans, R., & Zhu, F. (2013) · Management Science · doi:10.1287/mnsc.2013.1785 · Cited by 405
Unpaid Crowd Complementors: The Platform Network Effect Mirage
Boudreau, K. J., & Jeppesen, L. B. (2014) · Strategic Management Journal · doi:10.1002/smj.2324 · Cited by 381
“The prevailing characterization of platforms in the literature is as a multi-sided market in which complementors selling to users can generate cross-platform or “indirect” network effects (e.g., Parker and Van Alstyne, 2005; Rochet and Tirole, 2003; Rysman, 2009).”
Value Creation in the Video Game Industry: Industry Economics, Consumer Benefits, and Research Opportunities
Marchand, A., & Hennig‐Thurau, T. (2013) · Journal of Interactive Marketing · doi:10.1016/j.intmar.2013.05.001 · Cited by 401
The Digital Entrepreneurial EcosystemPreprint
Ács, Z. J., & Sussan, F. (2017) · SSRN Electronic Journal · doi:10.2139/ssrn.2918535 · Cited by 336
Bridging Differing Perspectives on Technological Platforms: Toward an Integrative Framework
Gawer, A. (2014) · Academy of Management Proceedings · doi:10.5465/ambpp.2014.278 · Cited by 319
Understanding FinTech start-ups – a taxonomy of consumer-oriented service offerings
Gimpel, H., Rau, D., & Röglinger, M. (2017) · Electronic Markets · doi:10.1007/s12525-017-0275-0 · Cited by 345
“The user ’ s currency dimen-sion covers the currency with which the users pays for using a service (Baden-Fuller and Haefliger 2013; Eisenmann et al. 2006; Rysman 2009).”
Background
Towards a Fair Marketplace
Mehrotra, R., McInerney, J., Bouchard, H., Lalmas, M., & Díaz, F. (2018) · ACM International Conference on Information and Knowledge Management (CIKM) · doi:10.1145/3269206.3272027 · Cited by 301
“…incorporating (business) constraints while optimizing metrics in a ranking setting [24] Marketplaces: Research on platforms, and marketplaces have enjoyed a long history of detailed research [23, 26], with past work exploring competition [3], strategies [7] and economies [16] in such marketplaces.”
Background
The Digital Entrepreneurial Ecosystem—a critique and reconfiguration
Song, A. K. (2019) · Small Business Economics · doi:10.1007/s11187-019-00232-y · Cited by 286
“Although somewhat self-referential, it is an important and necessary distinction given how much confusion revolves around the term (Rysman 2009).”
Background
The Ecosystem of Software Platform: A Study of Asymmetric Cross-Side Network Effects and Platform Governance1
Song, P., Xue, L., Rai, A., & Zhang, C. (2018) · MIS Quarterly · doi:10.25300/misq/2018/13737 · Cited by 273
The Antitrust Analysis of Multi-Sided Platform Businesses
Evans, D. S., & Schmalensee, R. (2013) · National Bureau of Economic Research · doi:10.3386/w18783 · Cited by 273
Scoping the Sharing Economy: Origins, Definitions, Impact and Regulatory IssuesPreprint
Codagnone, C., & Martens, B. (2016) · SSRN Electronic Journal · doi:10.2139/ssrn.2783662 · Cited by 272
“Furthermore, network effects can lead to tip toward a single dominant platform (Rysman, 2009).”
BackgroundMethodInfluential
The information value of online social networks: Lessons from peer-to-peer lending
Freedman, S. M., & Jin, G. Z. (2017) · International Journal of Industrial Organization · doi:10.1016/j.ijindorg.2016.09.002 · Cited by 233
Quantifying Cross and Direct Network Effects in Online Consumer-to-Consumer Platforms
Chu, J., & Manchanda, P. (2016) · Marketing Science · doi:10.1287/mksc.2016.0976 · Cited by 231
“Research on two-sided markets has a relatively short history (see Rysman 2009 and Sriram et al. 2015 for an overview).”
Background
Consumer Price Search and Platform Design in Internet Commerce
Dinerstein, M., Liran Einav, B., Levin, J., & Sundaresan, N. (2018) · American Economic Review · doi:10.1257/aer.20171218 · Cited by 217
Pricing in Ride-Share Platforms: A Queueing-Theoretic ApproachPreprint
Banerjee, S., Riquelme, C., & Johari, R. (2015) · SSRN Electronic Journal · doi:10.2139/ssrn.2568258 · Cited by 228
The Impact of Openness on the Market Potential of Multi-Sided Platforms: A Case Study of Mobile Payment Platforms
Ondruš, J., Collis, A., & Lyytinen, K. (2015) · Journal of Information Technology · doi:10.1057/jit.2015.7 · Cited by 223
“The growth of multi-sided platforms depends simultaneously on the positive sameside and cross-side network effects (Parker and Van Alstyne, 2005; Rysman, 2009).”
BackgroundInfluential
Externalities and complementarities in platforms and ecosystems: From structural solutions to endogenous failures
Jacobides, M. G., Cennamo, C., & Gawer, A. (2024) · Research Policy · doi:10.1016/j.respol.2023.104906 · Cited by 220
“…so-called “ sides ” ), and referred to as “ two-sided markets, ” “ multi-sided markets, ” or “ multi-sided platforms ” (MSPs); essentially, specific market architectures (Armstrong, 2006; Caillaud and Jullien, 2003; Evans et al., 2008; Evans, 2003; Rochet and Tirole, 2003, 2006; Rysman, 2009).”
Influential
Token-based platform finance
Cong, L. W., Li, Y., & Wang, N. (2021) · Journal of Financial Economics · doi:10.1016/j.jfineco.2021.10.002 · Cited by 222
Competition Between Two-Sided Platforms Under Demand and Supply Congestion Effects
Bernstein, F., DeCroix, G. A., & Keskin, N. B. (2020) · Manufacturing & Service Operations Management · doi:10.1287/msom.2020.0866 · Cited by 216
“, Knowledge@ Wharton (2017), Sherman (2017), Wilhelm (2017), and Cook and Price (2018)).”
Background
The evolution of the global digital platform economy: 1971–2021
Ács, Z. J., Song, A. K., Szerb, L., Audretsch, D. B., & Komlosi, E. S. (2021) · Small Business Economics · doi:10.1007/s11187-021-00561-x · Cited by 266
“…markets, or multisided platforms, are seen as special kinds of firms that facilitate exchange by allowing direct transactions between different types of consumers who could not otherwise transact (Armstrong, 2006; Evans et al., 2008; Evans, 2003; Rochet & Tirole, 2003, 2006; Rysman, 2009).”
Multisided Platforms as New Organizational Forms
McIntyre, D., Srinivasan, A., Afuah, A. N., Gawer, A., & Kretschmer, T. (2020) · Academy of Management Perspectives · doi:10.5465/amp.2018.0018 · Cited by 233
Platform competition: Who benefits from multihoming?
Belleflamme, P., & Peitz, M. (2018) · International Journal of Industrial Organization · doi:10.1016/j.ijindorg.2018.03.014 · Cited by 193
The Digital Transformation of News Media and the Rise of Disinformation and Fake NewsPreprint
Martens, B., Aguiar, L. L. M., GGmez, E., & Mueller‐Langer, F. (2018) · SSRN Electronic Journal · doi:10.2139/ssrn.3164170 · Cited by 227
“Anderson & Waldfogel (2016, p 49) and Rysman (2009) point out that a stronger advertising side (in terms of revenue per visitor) implies that access costs are lower on the reader side because that attracts more readers to the ads.”
Can We Predict the Winner in a Market with Network Effects? Competition in Cryptocurrency Market
Gandal, N., & Hałaburda, H. (2016) · Games · doi:10.3390/g7030016 · Cited by 202
Data-driven innovation: switching the perspective on Big Data
Trabucchi, D., & Buganza, T. (2018) · European Journal of Innovation Management · doi:10.1108/ejim-01-2018-0017 · Cited by 205
Government green procurement spillovers: Evidence from municipal building policies in California
Simcoe, T. S., & Toffel, M. W. (2012) · Journal of Environmental Economics and Management · doi:10.1016/j.jeem.2014.09.001 · Cited by 185
Outsourcing Tasks Online: Matching Supply and Demand on Peer-to-Peer Internet Platforms
Cullen, Z. B., & Farronato, C. (2020) · Management Sciences · doi:10.1287/mnsc.2020.3730 · Cited by 138
“Our research contributes to a growing literature studying multi-sided platforms as a distinct business model (Evans (2003), Rysman (2009), Allon et al. (2012), Hagiu and Wright (2015) ) that competes with more traditional service providers (Seamans and Zhu (2013), Zervas et al. (2016), and…”
From proprietary to collective governance: How do platform participation strategies evolve?
O'Mahony, S. C., & Karp, R. (2020) · Strategic Management Journal · doi:10.1002/smj.3150 · Cited by 190
Fostering digital platform innovation: From two to multi‐sided platforms
Trabucchi, D., & Buganza, T. (2019) · Creativity and Innovation Management · doi:10.1111/caim.12320 · Cited by 158
Digital platform-based business models – An exploration of critical success factors
Rohn, D., Bican, P. M., Brem, A., Kraus, S., & Clauß, T. (2021) · Journal of Engineering and Technology Management · doi:10.1016/j.jengtecman.2021.101625 · Cited by 155
A Short Survey of Network Economics
Shy, O. (2011) · Review of Industrial Organization · doi:10.1007/s11151-011-9288-6 · Cited by 154
Development and competition of digital service platforms: A system dynamics approach
Ruutu, S., Casey, T. H., & Kotovirta, V. (2017) · Technological Forecasting and Social Change · doi:10.1016/j.techfore.2016.12.011 · Cited by 150
“Rysman (2009) alsomentions the possibility for the providers of complimentary goods to differentiate their offerings as a factor that may lead to a winner-take-all situation.”
Explaining adoption and use of payment instruments by US consumers
Koulayev, S., Rysman, M., Schuh, S. D., & Stavins, J. (2016) · The RAND Journal of Economics · doi:10.1111/1756-2171.12129 · Cited by 146
“Our paper is relevant for the literature on two-sided markets as well (see Rochet and Tirole 2006; Rysman 2009; Hagiu and Wright 2011).”
Self-citation
Regulating TNCs: Should Uber and Lyft set their own rules?
Li, S., Tavafoghi, H., Poolla, K. R., & Varaiya, P. P. (2019) · Transportation Research Part B Methodological · doi:10.1016/j.trb.2019.09.008 · Cited by 130
“See [23] and [24] for a summary of literature on two-sided platforms, and [25] for a general theory of monopoly pricing in multi-sided platforms.”
Background
Why Do People Consume and Provide Sharing Economy Accommodation?—A Sustainability Perspective
Sung, E., Kim, H., & Lee, D. (2018) · Sustainability · doi:10.3390/su10062072 · Cited by 133
“In the two-sided market, service users and service providers interact across the platform, and the value of the platform increases with the size of the network [7].”
Background
Platform Desertion by App Developers
Tiwana, A. (2015) · Journal of Management Information Systems · doi:10.1080/07421222.2015.1138365 · Cited by 133
“Apps are central to vibrant platform ecosystems [13, 54], but they are plagued by high mortality rates ( 41 – 69 percent in recent estimates [ 73] Coordination costs borne by app developers can be the Achilles ’ heel in platform ecosystems, which potentially span millions of asynchronously evolving…”
Background
Why Do Payment Card Networks Charge Proportional Fees?
Shy, O., & Wang, Z. (2011) · American Economic Review · doi:10.1257/aer.101.4.1575 · Cited by 125
“max  Π  =   −  = ∙  (− )(1− ) −  ̧ ∙  (− )(1− ) ̧− 1   (11)”
Platforms as service ecosystems: Lessons from social media
Alaimo, C., Kallinikos, J., & Valderrama, E. (2019) · Journal of Information Technology · doi:10.1177/0268396219881462 · Cited by 132
“This two-way interdependence constitutes multi-sided platforms as a distinct type of digital intermediaries and confers value to the role of intermediation they perform (Rysman, 2009).”
Background
Platform Ecosystems: How Developers Invert the FirmPreprint
Parker, G., Alstyne, M. V., & Jiang, X. (2016) · SSRN Electronic Journal · doi:10.2139/ssrn.2861574 · Cited by 123
Regional income disparities, monopoly and finance
Feldman, M. P., Guy, F., & Iammarino, S. (2020) · Cambridge Journal of Regions Economy and Society · doi:10.1093/cjres/rsaa024 · Cited by 127
“Platforms— those serving primarily as intermediaries between customer and supplier—have complex pricing problems to solve (see Rysman 2009, for a summary).”
Background
From value chains to technological platforms: The effects of crowdfunding in the digital game industry
Nucciarelli, A., Li, F., Fernandes, K. J., Goumagias, N. D., Cabras, I., Devlin, S., Kudenko⋆, D., & Cowling, P. (2017) · Journal of Business Research · doi:10.1016/j.jbusres.2016.12.030 · Cited by 119
“Thereafter, the technological innovation embedded in hardware and software solutions has led to the transformation of the industry first into a two-sided market and then into a multi-sided market (Rysman, 2009).”
Background
How Incumbents Respond to Competition from Innovative Disruptors in the Sharing Economy: The Impact of Airbnb on Hotel Performance
Chang, H., & Sokol, D. D. (2020) · Strategic Management Journal · doi:10.1002/smj.3201 · Cited by 122
Digitization and the Contract Labor Market: A Research Agenda
Agrawal, A. K., Horton, J. J., Lacetera, N., & Lyons, E. (2013) · National Bureau of Economic Research · doi:10.3386/w19525 · Cited by 119
“Consistent with other two-sided markets, intermediaries in online markets take actions to ensure the participation of both suppliers and buyers (Armstrong, 2006; Rysman, 2009).”
Background
An Institutional Logics Perspective on the Gig Economy
Frenken, K., Vaskelainen, T., Fünfschilling, L., & Piscicelli, L. (2020) · Theorizing the Sharing Economy: Variety and Trajectories of New Forms of Organizing · doi:10.1108/s0733-558x20200000066005 · Cited by 118
Semi-collusion in media markets
Dewenter, R., Haucap, J., & Wenzel, T. (2011) · International Review of Law and Economics · doi:10.1016/j.irle.2011.02.001 · Cited by 113
“A negative attitude towards advertising leads to negative indirect net- 4For surveys of this literature see Roson (2005), Rochet and Tirole (2003, 2006) and Rysman (2009).”
Background
Paywalls and the demand for news
Chiou, L., & Tucker, C. E. (2013) · Information Economics and Policy · doi:10.1016/j.infoecopol.2013.03.001 · Cited by 111
“2 The debate reflects how newspapers serve as a multi-sided platform or network by bringing together readers and advertisers (Rysman, 2009; Chandra, 2009; Seamans and Zhu, 2011).”
Background
Opening the Floodgates: The Implications of Increasing Platform Openness in Crowdfunding
Wessel, M., Thies, F., & Benlian, A. (2017) · Journal of Information Technology · doi:10.1057/s41265-017-0040-z · Cited by 108
“from the participation of the respective other group (Ondrus et al., 2015; Parker and Van Alstyne, 2005; Rysman, 2009).”
Background
Choosing a Digital Content Strategy: How Much Should Be Free?
Halbheer, D., Stahl, F., Koenigsberg, O., & Lehmann, D. R. (2013) · Springer eBooks · doi:10.1007/978-3-031-88079-7_19 · Cited by 103
An Empirical Taxonomy of Crowdfunding Intermediaries
Haas, P., Blohm, I., & Leimeister, J. M. (2014) · Alexandria (UniSG) (University of St.Gallen) · Cited by 117
Platform Launch Strategies
Stummer, C., Kundisch, D., & Decker, R. (2018) · Business & Information Systems Engineering · doi:10.1007/s12599-018-0520-x · Cited by 108
“…also contain more than two sides, and that they can coexist with a traditional one-sided merchant business model in an overarching selling strategy (Rysman 2009), the investigation of these different types of platforms and the underlying business models, respectively, constitutes a second ﬁeld for…”
Influential
Newspapers in Times of Low Advertising Revenues
Angelucci, C., & Cagé, J. (2019) · American Economic Journal Microeconomics · doi:10.1257/mic.20170306 · Cited by 126
Why Discrete Price Fragments U.S. Stock Exchanges and Disperses Their Fee Structures
Chao, Y., Yao, C., & Ye, M. (2018) · Review of Financial Studies · doi:10.1093/rfs/hhy073 · Cited by 100
E-books: A Tale of Digital Disruption
Gilbert, R. J. (2015) · The Journal of Economic Perspectives · doi:10.1257/jep.29.3.165 · Cited by 104
“A key characteristic of a two-sided market is that purchases of one component affect consumers who purchase the other component (Rysman 2009).”
Background
Credit Rating Agencies: An Overview
White, L. J. (2013) · Annual Review of Financial Economics · doi:10.1146/annurev-financial-110112-120942 · Cited by 102
“For a more general discussion of two-sided markets, see, e.g., Rysman (2009).”
Background
Investigating the mix of strategic choices and performance of transaction platforms: Evidence from the crowdfunding setting
Dushnitsky, G., Piva, E., & Rossi‐Lamastra, C. (2020) · Strategic Management Journal · doi:10.1002/smj.3163 · Cited by 100
Platform-based mobile payments adoption in emerging and developed countries: Role of country-level heterogeneity and network effects
Kumar, V., Nim, N., & Agarwal, A. (2020) · Journal of International Business Studies · doi:10.1057/s41267-020-00346-6 · Cited by 110
Orchestration and governance in digital platform ecosystems: a literature review and trends
Mukhopadhyay, S., & Bouwman, H. (2019) · Digital Policy Regulation and Governance · doi:10.1108/dprg-11-2018-0067 · Cited by 97
Mobile Computing: The Next Platform Rivalry
Bresnahan, T., & Greenstein, S. (2014) · American Economic Review · doi:10.1257/aer.104.5.475 · Cited by 68
“This is the form most studied in the two-sided market literature (Rysman (2009).)”
Background
The Economics of Ownership, Access and Trade in Digital DataPreprint
Duch‐Brown, N., Martens, B., & Mueller‐Langer, F. (2017) · SSRN Electronic Journal · doi:10.2139/ssrn.2914144 · Cited by 92
Towards a sharing economy – Innovating ecologies of business models
Boons, F., & Bocken, N. M. P. (2018) · Technological Forecasting and Social Change · doi:10.1016/j.techfore.2018.06.031 · Cited by 92
“This interpretation also forms the basis for some of the current work on sharing business models, which looks at platforms and multi-sided markets (Rysman, 2009).”
Background
Precarious and Productive Work in the Digital Economy
Coyle, D. (2017) · National Institute Economic Review · doi:10.1177/002795011724000110 · Cited by 90
“Surveys can be found in Rysman (2009), Evans (2011), and Parker et al. (2016).”
Background
Platform governance and the rural–urban divide: Sellers' responses to design change
Koo, W. W.-Y., & Eesley, C. E. (2020) · Strategic Management Journal · doi:10.1002/smj.3259 · Cited by 94
Unraveling Platform Strategies: A Review from an Organizational Ambidexterity Perspective
Wan, X., Cenamor, J., PARKER, G. G., & Alstyne, M. V. (2017) · Sustainability · doi:10.3390/su9050734 · Cited by 98
“Moreover, platform owners can take a step further and facilitate, or limit, participation in the ecosystem based on inter-platform compatibility decisions [63].”
Background
Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey DataPreprint
Bagnall, J., Bounie, D., Huynh, K. P., et al. (2014) · SSRN Electronic Journal · doi:10.2139/ssrn.2436365 · Cited by 87
Platforms and network effects
Belleflamme, P., & Peitz, M. (2018) · Edward Elgar Publishing eBooks · doi:10.4337/9781788112789.00019 · Cited by 109
Platform competition with partial multi-homing: When both same-side and cross-side network effects exist
Xie, J., Zhu, W., Wei, L., & Liang, L. (2021) · International Journal of Production Economics · doi:10.1016/j.ijpe.2020.108016 · Cited by 85
Platforms, Power, and Promotion: Evidence from Spotify Playlists*
Aguiar, L. L. M., & Waldfogel, J. (2021) · Journal of Industrial Economics · doi:10.1111/joie.12263 · Cited by 85
“There is a large theoretical literature on platforms (see Rysman, 2009 for a summary) and a growing body of theoretical work on platform incentives to bias (Hagiu and Jullien, 2011; Cornière and Taylor, 2014).”
Background
Why payment card fees are biased against retailers
Wright, J. (2012) · The RAND Journal of Economics · doi:10.1111/1756-2171.12007 · Cited by 82
“The rapidly expanding literature on multi-sided platforms (e.g., Rochet and Tirole, 2003; Armstrong, 2006; Rysman, 2009; Weyl 2010) has cast some doubt over these concerns, noting that skewed pricing often arises (e.”
Background
Landlords with no lands: a systematic literature review on hybrid multi-sided platforms and platform thinking
Trabucchi, D., & Buganza, T. (2022) · European Journal of Innovation Management · doi:10.1108/ejim-11-2020-0467 · Cited by 83
The Topic Landscape of Disruption Research—A Call for Consolidation, Reconciliation, and Generalization
Hopp, C., Antons, D., Kaminski, J., & Salge, T. O. (2018) · Journal of Product Innovation Management · doi:10.1111/jpim.12440 · Cited by 89
Transforming into a platform provider: strategic options for industrial smart service providers
Beverungen, D., Kundisch, D., & Wünderlich, N. V. (2020) · Journal of service management · doi:10.1108/josm-03-2020-0066 · Cited by 81
Two-sided markets, pricing, and network effects
Jullien, B., Pavan, A., & Rysman, M. (2021) · Handbook of Industrial Organization · doi:10.1016/bs.hesind.2021.11.007 · Cited by 86
Self-citation
Insulated Platform CompetitionPreprint
White, A., & Weyl, E. G. (2010) · SSRN Electronic Journal · doi:10.2139/ssrn.1694317 · Cited by 75
The Future of Work in the ‘Sharing Economy’. Market Efficiency and Equitable Opportunities or Unfair Precarisation?Preprint
Codagnone, C., Fabienne, A., & Federico, B. (2016) · SSRN Electronic Journal · doi:10.2791/431485 · Cited by 96
“Rysman (Rysman, 2009) also used the expression ‘two-sided strategies’ to convey the idea that there are choices made by agents rather than an imposed endogenous industry structure.”
Platforms: a multiplicity of research opportunities
Sriram, S., Manchanda, P., Esteban-Bravo, M., Chu, J., Ma, L., Song, M., Shriver, S. K., & Subramanian, U. (2014) · Marketing Letters · doi:10.1007/s11002-014-9314-1 · Cited by 83
“4.1 Unanswered theoretical and conceptual questions Empirical research on platforms has mostly focused on pricing decisions (e.g., Rysman 2009).”
BackgroundInfluential
Identifying Two-Sided Markets
Filistrucchi, L., Geradin, D., & van Damme, E. E. C. (2012) · World Competition · doi:10.54648/woco2013003 · Cited by 107
“According to Rysman (2009), “[a]s this distinction often depends on the decisions of the intermediary rather than on purely technological features of the market, it may be better to use the term `two-sided strategies` rather than `two-sided markets`.””
Influential
Network effects in online two-sided market platforms: A research note
Li, S., Liu, Y., & Bandyopadhyay, S. (2010) · Decision Support Systems · doi:10.1016/j.dss.2010.02.004 · Cited by 78
Prices and Subsidies in the Sharing Economy
Fang, Z., Huang, L.-B., & Wierman, A. (2016) · The Web Conference · doi:10.1145/3038912.3052564 · Cited by 111
“This lack of understanding exists despite a large literature in economics studying two-sided markets, e.g., [31, 34, 29].”
Background
Information Management and Pricing in Platform Markets
Jullien, B., & Pavan, A. (2018) · The Review of Economic Studies · doi:10.1093/restud/rdy040 · Cited by 75
Innovation and Policy Support for Two-Sided Market Platforms: Can Government Policy Makers and Executives Optimize Both Societal Value and Profits?
Jung, D., Kim, B. C., Park, M., & Straub, D. W. (2019) · Information Systems Research · doi:10.1287/isre.2019.0851 · Cited by 76
The Perils of Laundering Control through Customers: A Study of Control and Resistance in the Ride-hail Industry
Maffie, M. D. (2020) · Industrial and Labor Relations Review · doi:10.1177/0019793920972679 · Cited by 75
“Similar to more traditional service companies, however, platform companies are dependent on developing a large customer base in order to create a defensible market position and eventually reach profitability (Rysman 2009).”
Background
Inter-Platform Competition in a Regulated Ride-Hail Market With Pooling
Zhang, K., & Nie, Y. M. (2020) · Transportation Research Part E Logistics and Transportation Review · doi:10.1016/j.tre.2021.102327 · Cited by 76
Soft and hard information in equity crowdfunding: network effects in the digitalization of entrepreneurial finance
Estrin, S., Khavul, S., & Wright, M. (2021) · Small Business Economics · doi:10.1007/s11187-021-00473-w · Cited by 78
“The platform facilitates direct exchanges between investors, on the one side, and entrepreneurs, on the other (Evans, 2008; Rochet & Tirole, 2003, 2006; Rysman, 2009).”
Background

Authors: Rysman, M.
Affiliations: Boston University (US)
Corresponding author: Rysman, Marc
ORCID: Rysman, Marc
Venue: Journal of Economic Perspectives
Publisher: American Economic Association
Published: 2009-08-01
Volume: 23
Issue: 3
Pages: 125-143
ISSN: 0895-3309 (ISSN-L)
DOI: 10.1257/jep.23.3.125
OpenAlex: W1982461819
Semantic Scholar: 1c0c366611a5049d783edb97c8fce22b666c4622
Cited by: 1,261
References: 71
Citations by year: 2026: 68 · 2025: 74 · 2024: 77 · 2023: 93 · 2022: 85 · 2021: 95 · 2020: 124 · 2019: 92 · 2018: 87 · 2017: 70 · 2016: 81 · 2015: 57 · 2014: 72 · 2013: 76 · 2012: 47
FWCI: 103.49
Type: journal article
Language: en
Open access: hybrid
doi.org
Licence: other-oa
Locations: The Journal of Economic Perspectives (publishedVersion, other-oa)
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 › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
Keywords: two-sided markets, platform intermediaries, network effects, externalities, payment cards, video game consoles, operating systems, competition policy, regulation, public policy, consumer electronics, search engines

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.

A language model drew the claims from the paper on 2026-10-11, under version 3 of the claim definition (model deepseek-v4.1-flash, prompt extract-v3).

A second model labelled each claim on 2026-10-11 (model jev-1.13-20260917, definition revision gold-guideline-v0.2).

Cited sources are checked with a language model’s help (gpt-6-sol).

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

The Economics of Two-Sided Markets

Abstract

Overview

Integrity signals

Verification

Claims the paper makes

Self-check

Citations

Cites

Cited by

Related

Metadata

Record

About these checks