Munich Personal RePEc Archive

Two-Sided Market with Spillover - Modeling a City

Shchetinin, Oleg (2009): Two-Sided Market with Spillover - Modeling a City.


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The paper explores the analogy between city and two-sided market. It generalizes the results on the pricing strategies of the platform in the two-sided markets for the case when concentration spillover plays an important role. The two-sided market framework is applied to model a city. The paper highlights the importance of the network effect and labor market structure for city size, governance and agglomeration formation. The cases of an isolated city and competing cities are considered.

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