Which scenario illustrates asymmetric cross-side network effects?

• A. A marketplace where sellers value many buyers, but buyers care less about the number of sellers
• B. A marketplace where buyers value many sellers, but sellers care less about buyers
• C. A marketplace where both sides value the number of participants equally
• D. A platform where there are no network effects

Answer: (A)

Cross-side network effects occur when the value a user derives from a platform depends on how many users are on the other side. When this effect is asymmetric, one side gains much more from increases on the opposite side than the other side does. In this marketplace, sellers benefit a lot from more buyers: a larger buyer pool means more demand, better liquidity, and the potential for higher sales and faster turnover. Buyers, however, don’t rely as heavily on the sheer number of sellers; their value comes from access, price competition, and convenience rather than simply how many sellers are present. So the size of the buyer side has a strong positive impact on sellers, while the size of the seller side has a weaker impact on buyers—this is precisely an asymmetric cross-side network effect.