26 Pages Posted: 21 Feb 2012
Date Written: February 21, 2012
We review the burgeoning literature on two-sided markets focusing on the different definitions that have been proposed. In particular, we show that the well-known definition given by Evans is a particular case of the more general definition proposed by Rochet and Tirole. We then identify the crucial elements that make a market two-sided and, drawing from both theory and practice, derive suggestions for the identification of the two-sided nature of a market. Our suggestions are relevant not only for the analysis of traditional two-sided markets, such as newspapers and payment cards, but also for the analysis of many new markets, such as those for online social networks, online search engines and Internet news aggregators.
Keywords: two-sided markets, platforms, network effects
JEL Classification: L40, L50, K21
Suggested Citation: Suggested Citation
Filistrucchi, Lapo and Geradin, Damien and van Damme, Eric, Identifying Two-Sided Markets (February 21, 2012). TILEC Discussion Paper No. 2012-008. Available at SSRN: https://ssrn.com/abstract=2008661 or http://dx.doi.org/10.2139/ssrn.2008661
By Marc Rysman