Two-sided Markets and Electronic Intermediaries

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may TWO-SIDED MARKETS AND ELECTRONIC INTERMEDIARIES AbstractThe object of this paper is to discuss on-line intermediation from the perspective of two-sided markets. It builds a simple model of the intermediation activity when trading partners are involved in a commercial relationship and uses it to illustrate some of the results that emerge in the two-sided market literature, as well as to discuss some new aspects. The first part concentrates on a monopoly intermediation service and discusses both efficient pricing and monopoly pricing. The second part discusses the nature of competition between intermediaries, addressing issues as competitive crosssubsidies, multi-homing or tying.JEL Code: D4, D85, L12, L13, L14, L40.

Two-Sided Markets: A Tentative Survey

“…1 Since then, contributions in various fields, like competition in media industries (for example, Ferrando et al, 2004;Reisinger, 2004;and Kaiser and Wright, 2004) or electronic intermediaries (Caillaud and Jullien, 2003;and Jullien, 2004), have been formulated from a two-sided markets perspective.…”

“…On the other hand, Jullien (2004) argues that, by reducing the gains from interaction, the total price level affects participation. Increasing it would mean reducing participation of both sides of the market.…”

Competition and antitrust in Internet markets

“…Even if multiple platforms are not associated with a duplication of fixed costs, the existence of multiple platforms may not be efficient due to the presence of indirect network effects. As Caillaud and Jullien (2003) and Jullien (2006) have shown, a monopoly platform can be efficient because network effects are maximized when all agents manage to coordinate over a single platform. Hence, strong network effects can easily lead to highly concentrated market structures, but strong network effects also tend to make these highly concentrated market structures efficient (also see Weyl, 2010;Chandra and Collard-Wexler, 2009).…”

“…However, with respect to the second driver of concentration, i.e., economies of scale, many two-sided markets are characterized by a cost structure with a relatively high proportion of fixed set-up and maintenance costs and relatively low variable costs (see, e.g., Jullien, 2006). For example, for eBay, Expedia, Booking.com etc.…”

Supporting business model decisions: a scenario-based simulation approach

“…The revenue model refers primarily to the type of revenue streams the company aims to generate (Osterwalder and Pigneur, 2010). The challenge of finding a revenue model in marketplaces or MSPs has been investigated theoretically by several scholars (Jullien, 2004, Parker and van Alstyne, 2005, Rochet and Tirole, 2006Hagiu, 2006). Firms can charge: 1 a commission fee as a percentage of the transaction value 2 a listing fee as a fixed cost to sellers for publishing an offering 3 a subscription fee as a fixed fee per time period for access to the marketplace.…”