Evolution of  Two-Sided Markets Yury Lifshits @ yurylifshits   Yahoo! Research  http://yury.name   Ravi Kumar  Yahoo! Rese...
Private  Structured  Real-time  Copyrighted
<ul><li>a ’ = V( b ) –  a </li></ul><ul><li>b ’ = W( a ) -  b </li></ul>Attachment curves model preferential attachment cr...
Market shares convergence
<ul><li>Two-sided markets: </li></ul><ul><li>algorithmic perspective </li></ul><ul><li>Model: Attachment curves </li></ul>...
Publishers Advertisers
 
Private  Structured  Real-time  Copyrighted
<ul><li>Craigslist </li></ul><ul><li>Hotjobs, careerBuilder, Monster, LinkedIn </li></ul><ul><li>ebay, Amazon Merchants </...
Research Agenda <ul><li>Evolution </li></ul><ul><ul><li>Network effect </li></ul></ul><ul><ul><li>Market structure </li></...
platform platform platform a%  market share b%  market share a’(t) = ? b’(t) = ?
<ul><li>a ’ =  b </li></ul><ul><li>b ’ =  a </li></ul>
<ul><li>a ’ =  b  –  a </li></ul><ul><li>b ’ =  a  –  b </li></ul>
<ul><li>a ’ = V( b ) –  a </li></ul><ul><li>b ’ = W( a ) -  b </li></ul>Attachment curves model preferential attachment cr...
Independent platforms a1 a4 a2 a3 a1 a4 a3 a2
Coalition Joint database
Market Shares Dynamics <ul><li>Theorem </li></ul><ul><li>Market shares stay the same </li></ul>A ’ =  B  –  A B ’ =  A  -  B
Technical Coalition <ul><li>Theorem </li></ul><ul><li>If all market shares are below 1/sqrt(k)   </li></ul><ul><li>coaliti...
Business Coalition <ul><li>Theorem </li></ul><ul><li>One can re-distribute revenue for full  </li></ul><ul><li>coalition i...
Stackoverflow.com
Stackoverflow.com
Future work <ul><li>Algorithm for solving attachment curve equation (starting position -> stable state) </li></ul><ul><li>...
<ul><li>Thanks! </li></ul><ul><li>@ yurylifshits  just presented “Evolution  </li></ul><ul><li>of Two-Sided Markets” at #w...
<ul><li>An agent joins if number of opposite-side connections to current platform users is at least T </li></ul><ul><li>Yo...
answers.yahoo.com
answers.yahoo.com
 
 
 
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Evolution of Two Sided Markets - Yury Lifshits - WSDM 2010

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Evolution of Two Sided Markets - Yury Lifshits - WSDM 2010

  1. 1. Evolution of Two-Sided Markets Yury Lifshits @ yurylifshits Yahoo! Research http://yury.name Ravi Kumar Yahoo! Research http://research.yahoo.com/Ravi_Kumar Andrew Tomkins Google Research http://www.tomkinshome.com/andrew/ paper: http:// bit.ly/twosided
  2. 2. Private Structured Real-time Copyrighted
  3. 3. <ul><li>a ’ = V( b ) – a </li></ul><ul><li>b ’ = W( a ) - b </li></ul>Attachment curves model preferential attachment crossing the chasm social influence
  4. 4. Market shares convergence
  5. 5. <ul><li>Two-sided markets: </li></ul><ul><li>algorithmic perspective </li></ul><ul><li>Model: Attachment curves </li></ul><ul><li>Convergence result </li></ul><ul><li>Coalitions </li></ul><ul><li>Measurements </li></ul>
  6. 6. Publishers Advertisers
  7. 8. Private Structured Real-time Copyrighted
  8. 9. <ul><li>Craigslist </li></ul><ul><li>Hotjobs, careerBuilder, Monster, LinkedIn </li></ul><ul><li>ebay, Amazon Merchants </li></ul><ul><li>eLance, guru.com, freelance.ru </li></ul><ul><li>Mechanical Turk, youDo, translated.by </li></ul><ul><li>AdWords, AdSense, DoubleClick, RightMedia </li></ul><ul><li>iTunes, lala, rhapsody, pandora, last.fm </li></ul><ul><li>OpenTable , RedBeacon </li></ul><ul><li>Yelp, Yahoo! Local </li></ul><ul><li>Threadless, Cafemax </li></ul><ul><li>Charities, Kickstarter </li></ul><ul><li>Facebook m arketplace, Yahoo! Newspaper Consortium </li></ul><ul><li>shopping.com, shopping.yahoo.com </li></ul><ul><li>eHarmony, Match.com, Yahoo! Personals </li></ul><ul><li>Upcoming, Facebook Events, evite, eventbrite, ticketmaster, TandP.ru </li></ul><ul><li>Expedia, Orbitz, Yahoo! Travel </li></ul><ul><li>CouchSurfing, HospitalityClub, AirBnB </li></ul><ul><li>Hulu, justin.tv, ustream </li></ul><ul><li>Alibaba.com </li></ul><ul><li>Carfax, Experian, Bloomberg </li></ul>
  9. 10. Research Agenda <ul><li>Evolution </li></ul><ul><ul><li>Network effect </li></ul></ul><ul><ul><li>Market structure </li></ul></ul><ul><ul><li>Evolution prediction </li></ul></ul><ul><li>Coalitions </li></ul><ul><ul><li>When centralization will happen? </li></ul></ul><ul><ul><li>When does it make sense to form a coalition? </li></ul></ul><ul><li>Investment strategies </li></ul><ul><ul><li>When to invest? Which side of the market? Critical mass? </li></ul></ul><ul><ul><li>Can we predict opportunities for snowball dynamics? </li></ul></ul>
  10. 11. platform platform platform a% market share b% market share a’(t) = ? b’(t) = ?
  11. 12. <ul><li>a ’ = b </li></ul><ul><li>b ’ = a </li></ul>
  12. 13. <ul><li>a ’ = b – a </li></ul><ul><li>b ’ = a – b </li></ul>
  13. 14. <ul><li>a ’ = V( b ) – a </li></ul><ul><li>b ’ = W( a ) - b </li></ul>Attachment curves model preferential attachment crossing the chasm social influence
  14. 15. Independent platforms a1 a4 a2 a3 a1 a4 a3 a2
  15. 16. Coalition Joint database
  16. 17. Market Shares Dynamics <ul><li>Theorem </li></ul><ul><li>Market shares stay the same </li></ul>A ’ = B – A B ’ = A - B
  17. 18. Technical Coalition <ul><li>Theorem </li></ul><ul><li>If all market shares are below 1/sqrt(k) </li></ul><ul><li>coalition is profitable for all distributors </li></ul><ul><li>Corollary </li></ul><ul><li>Coalitions are not monotone </li></ul><ul><li>Example: 5 : 4 : 1 : 1 </li></ul>
  18. 19. Business Coalition <ul><li>Theorem </li></ul><ul><li>One can re-distribute revenue for full </li></ul><ul><li>coalition in such a way that no subset </li></ul><ul><li>has an incentive to walk away and </li></ul><ul><li>form a sub-coalition. </li></ul>
  19. 20. Stackoverflow.com
  20. 21. Stackoverflow.com
  21. 22. Future work <ul><li>Algorithm for solving attachment curve equation (starting position -> stable state) </li></ul><ul><li>Stability under noise? </li></ul><ul><li>Predictive power? </li></ul><ul><li>Revenue redistribution for coalitions? </li></ul><ul><li>Investment strategies? </li></ul>
  22. 23. <ul><li>Thanks! </li></ul><ul><li>@ yurylifshits just presented “Evolution </li></ul><ul><li>of Two-Sided Markets” at #wsdm </li></ul><ul><li>http:// bit.ly/twosided </li></ul><ul><li>Please, retweet  </li></ul>
  23. 24. <ul><li>An agent joins if number of opposite-side connections to current platform users is at least T </li></ul><ul><li>You can pay uninterested agent to join </li></ul><ul><li>How much do you have to pay to get everyone on board? </li></ul>Open Problem
  24. 25. answers.yahoo.com
  25. 26. answers.yahoo.com

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