Benefits to each group demand economies of scale. Consumers, for example, prefer credit cards honored by more merchants, while merchants prefer cards carried by more consumers. Two-sided markets are particularly useful for analyzing the chicken-and-egg problem of standards battles, such as the competition between VHS and Beta. They are also useful in explaining many free pricing or "freemium" strategies where one user group gets free use of the platform in order to attract the other user group.http://ssrn.com/abstract=249585 Geoffrey Parker and Marshall Van Alstyne (2000) "Information Complements, Substitutes, and Strategic Product Design" Bernard Caillaud and Bruno Jullien (2003). "Chicken & Egg: Competing Matchmakers". RAND Journal of Economics 34(2) 309–328.http://idei.fr/doc/wp/2005/2sided_markets.pdf Jean-Charles Rochet and Jean Tirole (2005). [Two-Sided Markets: A Progress Report]http://hbr.harvardbusiness.org/2006/10/strategies-for-two-sided-markets/ar/1 Thomas Eisenmann, Geoffrey Parker, and Marshall Van Alstyne (2006). [ "Strategies for Two-Sided Markets." Harvard Business Review].
