Platform pricing redux

C-Tier
Journal: Southern Economic Journal
Year: 2020
Volume: 87
Issue: 2
Pages: 732-740

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Platforms such as Airbnb, Amazon, Apple iOS, eBay, Microsoft Windows, and Uber are ubiquitous. The two‐sided nature of platform markets, however, requires a reconsideration of the conditions for profit maximization and understanding of how platforms operate. Profit‐maximization in two‐sided markets is characterized as an intuitive extension of the inverse elasticity pricing rule (Lerner index). This is further expressed in terms of the participants' primitives: users' reservation values and the platform's marginal cost. Differences between one‐ and two‐sided markets are demonstrated and discussed.

Technical Details

RePEc Handle
repec:wly:soecon:v:87:y:2020:i:2:p:732-740
Journal Field
General
Author Count
1
Added to Database
2026-01-24