Optimal Price Allocations in Two-Sided Markets

This paper derives an optimal allocation rule (?*) that (i) assigns a share of the transaction price to the buyer-side of the two-sided market; (ii) is equivalent to the Rochet-Tirole price structure rule; and (iii) is a function of the own/cross-price elasticities. For linear demands, demand symmetry is sufficient for ?* = ½ and ?* is decreasing (increasing) in the own-price (cross-price) sensitivity parameter of buyer-side demand.

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Year of publication:	2010
Authors:	Weisman, Dennis L
Published in:	Review of Network Economics. - De Gruyter, ISSN 1446-9022, ZDB-ID 2139394-1. - Vol. 9.2010, 3
Publisher:	De Gruyter
Subject:	two-sided markets \| price allocations

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Type of publication:	Article
Type of publication (narrower categories):	research-article
Language:	English
Other identifiers:	10.2202/1446-9022.1220 [DOI]
Source:	Other ZBW resources

Persistent link: https://www.econbiz.de/10014619167