Richard Schmalensee Books

Many dynamic public companies, like Alibaba and Facebook, as well as valuable start-ups such as Airbnb and Uber, function as matchmakers that connect different customer groups. Economists refer to these as multisided platforms, which facilitate interactions between multiple parties. For instance, dating sites link individuals seeking relationships, while ride-sharing apps connect drivers with riders. Although matchmakers have existed for centuries, their popularity and profitability have surged due to technological advancements. However, launching a matchmaking business is incredibly challenging, and many who attempt it fail. In this insightful work, economists David Evans and Richard Schmalensee, pioneers in analyzing multisided platforms, delve into the mechanics of successful matchmakers. They share practical insights on why these platforms operate effectively and how entrepreneurs can enhance their chances of success. As multisided platforms increasingly shape the future for entrepreneurs, investors, consumers, and executives alike, this book—filled with compelling stories of both triumphs and failures—serves as an essential guide to navigating this complex landscape.

The definitive account of the trillion-dollar payment card industry. The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes—including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce—that could alter the payment card industry dramatically in the years to come.