In contrast to traditional business models, two-sided platforms internalize indirect network effects that exist between different groups of platform participants. The strength of the network effects has a decisive influence on the success of the platform and its market position. Markets with...

We study a two-sided markets model of two competing television stations that offer content of differentiated quality to ad-averse consumers and advertising space to firms. As all consumers prefer high over low quality content, competition for viewers is vertical. By contrast, competition for...

Platforms play an essential role in the modern economy. At the same time, algorithms are becoming more widely used for pricing and other business functions. Previous literature examined algorithmic pricing, but not in the context of network effects and platforms. Moreover, platform competition...

This paper investigates the upcoming business model of online streaming services allowing music consumers either to subscribe to a service which provides free-of-charge access to streaming music and which is funded by advertising, or to pay a monthly flat fee in order to get ad-free access to...

We study a model of film distribution and consumption. The studio can release two goods, a theatrical and a video version, and has to decide on its versioning and sequencing strategy. In contrast with the previous literature, we allow for the possibility that some consumers may watch both...

Both sides of a two-sided market are usually modeled as markets without product differentiation. Often however, it will be profit maximizing to differentiate one or two sides in two or more types. In a simple theoretical model, inspired by Yellow Pages, we show that this decision crucially...

An important reason for the Internet's remarkable growth over the last quarter century is the "end-to-end" principle that networks should confine themselves to transmitting generic packets without worrying about their contents. Not only has this made deployment of internet infrastructure cheap...

Software firms often remove some functions of his product and sell the damaged version at a lower or zero price. This paper extends Hahn's functional degradation model into a continuous type framework, derives the conditions for introducing the read-only version, and the conditions for selling...

This paper reviews the small but growing economic literature on network neutrality. It considers a number of possible departures from network neutrality, in particular termination fees, second-degree price discrimination, and vertical foreclosure