The price is right in 2-sided markets: Review and hypothesis generation

Abstract

Price advantage distinguishes a sharing economy. Two-sided markets underlie sharing economies and contribute to price advantage. Airbnb employs a platform based on 2-sided markets which are lower in price than traditional hotels. Next, we investigate internet technology as a major disruptive innovation. We demonstrate the impacts of internet marketing as an outgrowth of internet technology. The continued growth of the sharing economy is examined within the framework of internet marketing evolution. We then study the growth of the sharing economy due to use of the Internet. The growing importance of access to consumption supersedes possession through ownership. The Airbnb case is our prime case study and it will be used to illustrate that most consumers benefit from 2-sided markets. Five major hypotheses are generated on the benefits of 2-sided markets, and implications for entrepreneurship are discussed.