Network effects in two-sided markets: Why a 50/50 user split is not necessarily revenue optimal

Artikel

Our study applies empirical scrutiny to the network effects of a leading European online dating platform. While one might expect equal gender representation on such a platform to yield the best user experience and the highest revenue per user, our analysis shows that the platform requires only 36.2 % of its user base to be female to maximize revenue, primarily because women exert stronger positive cross-side network effects on men than vice versa; this optimum results in 17.2 % higher sales than a 50/50 split. Intermediaries of two-sided markets can use our model to improve user acquisition strategies.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Business Research ; ISSN: 2198-2627 ; Volume: 8 ; Year: 2015 ; Issue: 1 ; Pages: 139-170 ; Heidelberg: Springer

Classification and Topics

• Classification: Management
• Subject: Network effects ; Two-sided markets ; Online dating ; Willingness to pay ; Revenue optimization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Voigt, Sebastian ; Hinz, Oliver
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2015

Further information

• DOI: doi:10.1007/s40685-015-0018-z
• Handle: http://hdl.handle.net/10419/156274