Optimal Growth in Two-Sided Markets
summary
A macro control model ties buyer and seller stocks to a homogeneous production function, adoption and attrition dynamics, and platform-set prices and wages. The two-state problem collapses to a single market size X with an optimal gamma balance that trades output versus durability. Key claims: subsidies can be optimal, optimal policy often uses impulse subsidy or the fastest feasible path, fast growth beats slow growth under both increasing and decreasing returns, and results assume a monopoly assumption and linear acquisition dynamics.
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chapters (25)
- 0:00Intro
- 1:25Motivation
- 3:16Key questions
- 4:13or is the "blitzscaling" buzz justified?
- 5:04Literature
- 7:52Output model
- 11:04Uber napkin diagram
- 16:00Prices and buyer/seller surplus
- 18:56Growth model
- 21:39The platform
- 24:11Market size and balance reformulation
- 28:41Faster growth vs. slower growth
- 30:10Infinite horizon problem (reformulated)
- 30:53Examples of growth path constraints X
- 34:24Optimal balance
- 36:13Driving forces
- 37:05Increasing returns to scale market
- 38:17Stationary solution
- 39:17Optimal growth policy
- 40:53Optimal policy increasing returns (a 1)
- 43:19Optimal policy decreasing returns (a 1)
- 44:46Numerical example (a 1)
- 46:47Matching function
- 47:04Summary
- 48:05Work-in-progress: Oligopoly growth
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