Two-sided markets, pricing, and network effects

Pavan, Alessandro; Rysman, Marc

doi:10.1016/bs.hesind.2021.11.007

Cited by 40 publications

(14 citation statements)

References 251 publications

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“… 20 Rochet and Tirole (2006) note that “a factor that is conducive to a high price on one side, to the extent that it raises the platform’s margin on that side, tends also to call for a low price on the other side as attracting members on that other side becomes more profitable.” The dynamics are similar to those in a competitive bottleneck model, as discussed in Jullien et al (2021). Users on one side of the market primarily engage with just one platform (“single-home”), while users on the other side use multiple platforms (“multi-home”).…”

supporting

confidence: 74%

Algorithmic attention rents: A theory of digital platform market power

O’Reilly,

Strauss,

Mazzucato

2024

Data & Policy

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We outline a theory of algorithmic attention rents in digital aggregator platforms. We explore the way that as platforms grow, they become increasingly capable of extracting rents from a variety of actors in their ecosystems—users, suppliers, and advertisers—through their algorithmic control over user attention. We focus our analysis on advertising business models, in which attention harvested from users is monetized by reselling the attention to suppliers or other advertisers, though we believe the theory has relevance to other online business models as well. We argue that regulations should mandate the disclosure of the operating metrics that platforms use to allocate user attention and shape the “free” side of their marketplace, as well as details on how that attention is monetized.

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supporting

confidence: 74%

Algorithmic attention rents: A theory of digital platform market power

O’Reilly,

Strauss,

Mazzucato

2024

Data & Policy

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“…(People who do not use the platforms would also be better off if their friends rejoined them in the physical world.) Social media platforms, as the name indicates, have an irreducible social component: people use these platforms to connect with other people, and that means that 2 For a recent survey on the economics of network effects, see Jullien, Pavan, and Rysman (2021); for one of many legal discussions, see Ginsburg, Masur, and McAdams (2014).…”

Section: Barbie Goods and Product Market Trapsmentioning

confidence: 99%

Labor market traps

Posner

2024

Behav. Public Policy

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Some products, notably but not only platforms, increase in value for users as the number of other users increases. These interaction or network effects can result in ‘product market traps’ (Bursztyn et al., 2023) where people who use the product would be better off if they all stopped using it and switched to another product, but cannot because of coordination problems. A parallel but overlooked phenomenon is the labor market trap, where employees would be better off if they collectively left an employer, job, or profession, but cannot because of the difficulty of coordination. Product market and labor market traps pose a challenge to public policy because of the complexity of people's behavior in networks, but can be mitigated in some cases with relatively simple taxes and regulatory interventions.

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“…Dalam artikelnya, (Jullien et al, 2021)menyebutkan bahwa literatur tentang efek jaringan dan pasar dua sisi diprakarsai oleh (Baxter, 1983;Rohlfs, 1974), dan (Rosse, 1970) di sisi bukti empiris. Inkarnasi modern dari literatur tentang efek jaringan biasanya dikaitkan dengan penelitian (Arthur, 1989), (Farrell & Saloner, 1986) dan (Katz & Shapiro, 1985).…”

Section: Eksternalitas Jaringan Dan Pasar Dua Sisiunclassified

Dampak Inovasi Sistem Pembayaran Terhadap Nilai Pemegang Saham Bank Dan Pengecer

Muditomo¹,

Syaukat²,

Andati³

et al. 2022

JRAK

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Artikel ini bertujuan meneliti respon pasar modal terhadap penerapan Gerbang Pembayaran Nasional Indonesia, untuk membuktikan bahwa interkoneksi dan interoperabilitas transaksi di merchant akan meningkatkan penerimaan kartu debit dan uang elektronik pada sisi permintaan, mendorong lebih banyak transaksi di merchant dan mengurangi biaya pertukaran sehingga akan meningkatkan pendapatan pedagang pada sisi penawaran. Hasil penelitian menunjukkan bahwa pasar modal merespon positif dampaknya terhadap kinerja saham bank penerbit tetapi memberikan respon negatif terhadap saham pengecer. Penelitian ini melengkapi literatur penelitian event-study terdahulu di pasar modal Indonesia serta memberikan literatur baru tentang dampak model pasar dua sisi pembayaran ritel elektronik dari sudut pandang eksternalitas jaringan antara bank penerbit dan pengecer. Penelitian ini dilakukan hanya pada pasar modal Indonesia dan hanya pada implementasi kartu debit GPN.

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Two-sided markets, pricing, and network effects

Cited by 40 publications

References 251 publications

Algorithmic attention rents: A theory of digital platform market power

Algorithmic attention rents: A theory of digital platform market power

Labor market traps

Dampak Inovasi Sistem Pembayaran Terhadap Nilai Pemegang Saham Bank Dan Pengecer

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