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The structuring of markets for infomediation: horizontal versus vertical dynamics

Kevin Mellet

No 2007-13, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: Two factors play a decisive role in the structuring of Internet based markets for infomediation (informational intermediation) : network externalities and information processing. First, these are examined separately. The two-sided markets literature focuses on the impact of network externalities in a context of competition among 2-sided platforms. It explains the level of concentrationfragmentation of those markets, and explores its welfare implications. We shall call this model the "horizontal" model of structuring. Symetrically, a "vertical" process of division of labour among the infomediaries' value chain is observed. It results of the complexification of intermediation in a context of strong quality uncertainty and high codification investments. Intermediaries specialize and develop cooperative relationships with each others. Secondly, the paper examines the implications of the simultaneous co-existence of H and D dynamics on the structuring of the market for infomediation. This co-existence generates frictions. Two levels of frictions are distinguished : i) market governance (standards and certifications) ; ii) commercial interactions (the so-called 'coopetition'). Empirical illustrations are taken from the analysis of Internet based labour market intermediaries.

Keywords: Two-sided markets; competition; vertical specialization; regulation; coopetition; labour market intermediaries. (search for similar items in EconPapers)
Pages: 17 pages
Date: 2007
New Economics Papers: this item is included in nep-com, nep-ict, nep-lab, nep-mic and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2007-13

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