Two-Sided Market
Updated 2026-08-02
INTRODUCTION
English translation pending.
CORE DEFINITION
Described by the economists Jean-Charles Rochet and Jean Tirole, a two-sided market is a platform that connects two distinct groups whose participation benefits the other side, such as buyers and sellers or riders and drivers. The platform must choose a price structure across both sides, often subsidizing the side that is harder to attract and charging the side that values access more. Cross-side network effects mean the value of the platform depends on balancing both groups. Key qualification: the cold-start problem means pricing cannot be set independently of which side is attracted first.
SCAFFOLDING EFFECT
Reduce cognitive load
- Pick the side: decide which group to subsidize first so the other has a reason to join. - Price asymmetrically: charge the side that gains more from access and subsidize the harder side. - Watch multihoming: check whether users also participate on rival platforms, which weakens exclusivity.
Anchor fast decisions
Each side joins only if the other side is present, so neither group will move first on its own. The platform breaks the deadlock by subsidizing one side until it reaches critical mass, which then attracts the other side through cross-side network effects. Once both are present, the platform captures value by charging the side with the higher willingness to pay for access.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- zh.wikipedia.orghttps://zh.wikipedia.org/wiki/%E9%9B%99%E9%82%8A%E5%B8%82%E5%A0%B4verified
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