Publications

June 2007
Article

Merchant or Two-Sided Platform?

By: Andrei Hagiu

This paper provides a first pass at clarifying the economic tradeoffs between two polar strategies for market intermediation: the "merchant" mode, in which the intermediary buys from sellers and resells to buyers; and the "two-sided platform" mode, under which the... View Details

Keywords: Merchants; Two-sided Platforms; Intermediaries; Two-Sided Markets; Digital Platforms

July 2007 (Revised March 2008)
Background Note

Staging Two-Sided Platforms

By: Thomas R. Eisenmann and Andrei Hagiu

Firms that aspire to develop two-sided platforms face a formidable challenge. Prospective users on each side will not invest in the platform until they are confident there will be enough users on the other side. Traditional strategies for dealing with this... View Details

Keywords: Business Model; Risk Management; Two-Sided Platforms; Supply Chain; Strategy; Retail Industry

Educators

Purchase

2021
Working Paper

Exclusive Dealing and Entry by Competing Two-Sided Platforms

By: Cristian Chica, Kenneth Chuk and Jorge Tamayo

We study competition between horizontally differentiated platforms offering exclusive and non-exclusive contracts to one side of the market (content providers). The introduction of non-exclusive contracts in addition to exclusive contracts softens the competition for... View Details

Keywords: Two-Sided Markets; Platform Price Competition; Network Externalities; Exclusive Contracts; Multi-homing; Digital Platforms; Price; Competition; Contracts

April 2013
Article

First-Party Content and Coordination in Two-Sided Markets

By: Andrei Hagiu and Daniel Spulber

The strategic use of first-party content by two-sided platforms is driven by two key factors: the nature of buyer and seller expectations (favorable versus unfavorable) and the nature of the relationship between first-party content and third-party content (complements... View Details

Keywords: Two-sided Platforms; Platform Strategy; Technology; Information Technology; Performance Expectations; Strategy; Digital Platforms

Purchase

May 2014
Article

Information and Two-Sided Platform Profits

By: Andrei Hagiu and Hanna Halaburda

We study the effect of different levels of information on two-sided platform profits under monopoly and competition. One side (developers) is always informed about all prices and therefore forms responsive expectations. In contrast, we allow the other side (users) to... View Details

Keywords: Responsive Expectations; Passive Expectations; Wary Expectations; Information; Performance Expectations; Two-Sided Platforms; Monopoly

SSRN

22 Jun 2007
Working Paper Summaries

Proprietary vs. Open Two-Sided Platforms and Social Efficiency

Keywords: by Andrei Hagiu; Video Game; Web Services

July 2023
Article

Marketplace Scalability and Strategic Use of Platform Investment

By: Jin Li, Gary Pisano, Richard Xu and Feng Zhu

The scalability of a marketplace depends on the operations of the marketplace platform as well as its sellers’ capacities. In this study, we explore one strategy that a marketplace platform can use to enhance its scalability: providing an ancillary service to sellers.... View Details

Keywords: Two-sided Platforms; Services; Digital Platforms

14 May 2009
Working Paper Summaries

Quantity vs. Quality and Exclusion by Two-Sided Platforms

Keywords: by Andrei Hagiu; Video Game; Web Services

Research Summary

Dynamic Demand Estimation in Platform and Two-Sided Markets

This paper develops techniques to structurally estimate consumer demand in general platform-intermediated and two-sided markets. By estimating both sides of the market simultaneously, the methodology presented here is able to (1) endogenize the utility of a platform as... View Details

2009
Working Paper

Strategic Interactions in Two-Sided Market Oligopolies

By: Emmanuel Farhi and Andrei Hagiu

Strategic interactions between two-sided platforms depend not only on whether their decision variables are strategic complements or substitutes as for one-sided firms, but also -and crucially so- on whether or not the platforms subsidize one side of the market in... View Details

Keywords: Two-Sided Markets; Strategic Complements; Strategic Substitutes; Cost; Investment; Profit; One-Sided Platforms; Two-Sided Platforms; Duopoly and Oligopoly; Competitive Advantage

Summer 2015
Article

Investment Incentives in Open-Source and Proprietary Two-Sided Platforms

By: Ramon Casadesus-Masanell and Gaston Llanes

We study incentives to invest in platform quality in open-source and proprietary two-sided platforms. Open platforms have open access, and developers invest to improve the platform. Proprietary platforms have closed access, and investment is done by the platform owner.... View Details

Keywords: Motivation and Incentives; Digital Platforms; Open Source Distribution; Investment

31 Jul 2012
Working Paper Summaries

Investment Incentives in Proprietary and Open-Source Two-Sided Platforms

Keywords: by Ramon Casadesus-Masanell & Gastón Llanes

Article

Pricing and Commitment by Two-Sided Platforms

By: Andrei Hagiu

Keywords: Price; Two-Sided Platforms

March 2014
Article

Search Diversion and Platform Competition

By: Andrei Hagiu and Bruno Jullien

Platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products (e.g., advertising). We show that competition between platforms leads to lower equilibrium levels of search diversion... View Details

Keywords: Market Intermediation; Search; Two-Sided Markets; Platform Design; Platform Competition; Competition; Two-Sided Platforms