Explore the dynamics of optimal growth in two-sided markets through this 52-minute lecture by Garret Van Ryzin from Cornell Tech. Delve into platform markets, examining key questions surrounding the "blitzscaling" phenomenon and its justification. Analyze the output model, including Uber's napkin diagram, pricing strategies, and buyer/seller surplus. Investigate the growth model, market size, and balance reformulation, comparing faster and slower growth scenarios. Examine the infinite horizon problem, growth path constraints, and optimal balance. Discover driving forces in increasing returns to scale markets, stationary solutions, and optimal growth policies for both increasing and decreasing returns. Conclude with a numerical example, matching function analysis, and a brief look at work-in-progress on oligopoly growth in platform markets.
Overview
Syllabus
Intro
Motivation
Key questions
or is the "blitzscaling" buzz justified?
Literature
Output model
Uber napkin diagram
Prices and buyer/seller surplus
Growth model
The platform
Market size and balance reformulation
Faster growth vs. slower growth
Infinite horizon problem (reformulated)
Examples of growth path constraints X
Optimal balance
Driving forces
Increasing returns to scale market
Stationary solution
Optimal growth policy
Optimal policy increasing returns (a 1)
Optimal policy decreasing returns (a 1)
Numerical example (a 1)
Matching function
Summary
Work-in-progress: Oligopoly growth
Taught by
Simons Institute
