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Market Definition of Platform Markets

Ralf Dewenter, Ulrich Heimeshoff () and Franziska Löw
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Ulrich Heimeshoff: Düsseldorf Institute for Competition Economics, Postal: Universitätsstr. 1, 40225 Düsseldorf

No 176/2017, Working Paper from Helmut Schmidt University, Hamburg

Abstract: Platform markets are characterized by the existence of indirect network effects that connect two or more market sides through a platform that internalizes these feedback effects. Conventional instruments of market definitions which consider price levels cannot easily applied in case of two-sided platform competition, as price structure of those markets are non-neutral. Instead of using prices, we use time series of quantities and simple correlation analysis to evaluate the substitutional relationship within two-sided media markets. As a benchmark model, we simulate a Cournot duopoly on order to calculate correlation coefficients for varying degrees of product differentiation and indirect network effects.

Keywords: two-sided markets; market definition; printed media; network effects (search for similar items in EconPapers)
JEL-codes: D43 L40 L82 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2017-03-14
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
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