The structuring of markets for infomediation: horizontal versus vertical dynamics

Kevin Mellet ()
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Kevin Mellet: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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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)
Date: 2007
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