Inter-firm Coordination
Wednesday, May 17, 2006

Bruno Jullien

U. Toulouse

Bruno Jullien

The Economics of Two-Sided Platforms

Abstract

The lecture will present recent developments in the economics of platforms, in particular based on the concept of two-sided markets. The concept refers to institutions that are used by two groups of actors (two sides) to interact, situations that are characterized by network externalities between these two distinct sides. The lecture will introduce to the various models and problematic arising in such a context. The first part will be devoted to the analysis of monopoly pricing and efficient prices, discussing the distinction between the participation to the platform activity and the level of usage, the role of transaction fees, with an emphasis on coordination issues.  The second part will discuss competition between platforms, and issues such as cross-subsidy and “multi-homing” (this refers to the possibility that an agent uses several platforms). The last part will discuss some implications for anti-trust and regulation.