The Contractual Nature of Two-Sided Platforms: A Research Note

EALR, V. 5, nº 1, p. 48-61, Jan-Jun, 2014

13 Pages Posted: 7 Aug 2013 Last revised: 3 Jul 2014

See all articles by Guilherme Fowler Monteiro

Guilherme Fowler Monteiro

Insper Institute of Education and Research; Center for Organization Studies

Elizabeth Maria Merc Querido Farina

University of São Paulo (USP) - Department of Economics

Rubens Nunes

University of Sao Paulo (USP) - Department of Biosystems Engineering

Date Written: August 6, 2013

Abstract

The present paper investigates the organizational nature of two-sided platforms. The article departs from the classical case of an industry that presents some intrinsic characteristics which give to it the status of a two-sided market. Specifically, the paper considers that the decision of a firm to operate as a traditional merchant or as a platform is based on a bargaining process between the firm and its suppliers, resulting in an incomplete contract which is supported by a particular combination of price and non-price instruments. Founded on this approach, this essay addresses some fundamental issues in the economics of hybrid forms in two-sided platforms through the examination of the decision of a supermarket to operate as a conventional retailer or as a platform.

Keywords: Two-sided Platforms, Merchant, Incomplete Contracts, Organizational Forms

JEL Classification: L22, D23, D86

Suggested Citation

Monteiro, Guilherme Fowler and Merc Querido Farina, Elizabeth Maria and Nunes, Rubens, The Contractual Nature of Two-Sided Platforms: A Research Note (August 6, 2013). EALR, V. 5, nº 1, p. 48-61, Jan-Jun, 2014. Available at SSRN: https://ssrn.com/abstract=2306547 or http://dx.doi.org/10.2139/ssrn.2306547

Guilherme Fowler Monteiro (Contact Author)

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

Center for Organization Studies

Av. Luciano Gualberto, 908
Sao Paulo, Sao Paulo 05508-900
Brazil

Elizabeth Maria Merc Querido Farina

University of São Paulo (USP) - Department of Economics ( email )

Av. Pádua Dias, 11 - C.P. 9
Sao Paulo SP, 05508-900
Brazil

Rubens Nunes

University of Sao Paulo (USP) - Department of Biosystems Engineering ( email )

Rua Luciano Gualberto, 315
São Paulo, São Paulo 14800-901
Brazil

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