Platform Pricing in Mixed Two-Sided Markets

When a consumer can appear on both sides of a two-sided market, such as a user who both buys and sells on eBay, the platform may want to bundle the services it provides to two sides. I develop a general model for such "mixed" two-sided markets, and show that a monopolist platform's incentive to bundle and its optimal pricing strategy are determined by simple formulas using familiar price elasticities of demand, which embody the bundling effect, and price-cost margins adjusted for network externalities, which incorporate "two-sidedness". The optimal pricing rule in such markets generalizes the familiar Lerner formula