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Identifying Two-Sided Markets

Lapo Filistrucchi (), Damien Geradin and Eric van Damme
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Damien Geradin: Tilburg University

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: We review the burgeoning literature on two-sided markets focusing on the different definitions that have been proposed. In particular, we show how 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 (search for similar items in EconPapers)
JEL-codes: L40 L50 K21 (search for similar items in EconPapers)
Date: 2012
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