Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, May 31, 2007

The Empirics of Antitrust in Two-Sided Markets

Posted by D. Daniel Sokol

Marc Rysman of Boston University - Department of Economics has a new article that appears in Competition Policy International on two sided markets, an issue that has received an increasing amunt of attention, such as with payments systems (which I am teaching for the first time this coming spring) or computer software.  His article is entitled The Empirics of Antitrust in Two-Sided Markets.

ABSTRACT: Recent theoretical research on the implications of two-sided markets is gaining recognition for its implications inantitrust. However, the role of empirical analysis in antitrust cases for two-sided markets has been unexplored thus far. Empirical tools of economics are playing an increasingly large role in antitrust litigation. At the same time, there have been several recent attempts to bring empirical analysis to two-sided markets. To the extent that this empirical work on two-sided markets bares similarities to common empirical tools of antitrust, it can provide a template for how the empirics of antitrust cases will proceed in two-sided markets.

This paper studies several issues in which empirical contributions can impact antitrust in the context of two-sided markets. For each issue, I discuss recent empirical research that exemplifies my point. The first issue I discuss is the implementation of market simulations. Market simulations have an important role in determining relevant markets and the price effects of horizontal coordination.

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