We derive a general two-sided market model in which heterogeneous agents endogenously decide whether to become buyers, sellers or both (seller-buyers). Bearing in mind that the monopolistic platform usually offers a large enough discount to join both sides, we provide conditions under which the later are present in equilibrium in different setups. In particular, we consider both, markets with an access fee for sellers and buyers, and markets in which buyers join for free (similar to many online platforms). We show equilibrium existence and characterize it, derive optimal and Ramsey pricing and provide many avenues for applied future research in monopolistic two-sided markets.
Contact: Florencio Lopez de Silanes or Armin Schwienbacher