Tuesday, April 28, 2015

economy: Two-sided market

This concept is refereed by Stanford futurist  Paul Saffo
as a key concept for upcoming new-new economy.
DraganSr: ideas: Future "Creator Economy" by Paul Saffo (!)

Two-Sided Markets: A Progress Report

Two-sided market - Wikipedia, the free encyclopedia
"Two-sided markets, also called two-sided networks, are economic platforms having two distinct user groups that provide each other with network benefits. The organization that creates value primarily by enabling direct interactions between two (or more) distinct types of affiliated customers is called multi-sided platform (MSP)... 
Example markets include credit cards, composed of cardholders and merchants; HMOs (patients and doctors); operating systems (end-users and developers); yellow pages (advertisers and consumers); video game consoles (gamers and game developers); recruitment sites (job seekers and recruiters); search engines (advertisers and users); and communication networks, such as the Internet."

"Traditional pricing logic seeks the biggest revenue rectangle (price × quantity) under each demand curve. In two-sided networks, such pricing logic can be misguided. If firms account for the fact that adoption on one side of the network drives adoption on the other side, they can do better. Demand curves are not fixed: with positive cross-side network effects, demand curves shift outward in response to growth in the user base on the network's other side. "


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