Thursday, February 19, 2009
Posted by D. Daniel Sokol
Lecturer(s): Professor David S. Evans and Richard Schmalensee
Two-sided markets is one of the hottest areas in economics and competition policy. Some businesses operate platforms that connect two groups of customers, help those customers interact, and in doing so create value. Economists and antitrust practitioners have known for a long time that advertising-supported media had two groups of customers: the readers and the advertisers. But only since 2000 have economists understood that having two groups of distinct customers is a common feature of many businesses, old and new, and that this feature has tremendous implications for the economics of these businesses. From shopping malls to computer-operating systems to payment schemes to search-based advertising, two-sided issues loom large.
It is now widely recognized by antitrust and economic scholars that analyzing competitive practices such as mergers and abuse of dominance in these two-sided industries requires special consideration. This course, by two of the leading contributors to the two-sided literature, will provide a basic introduction to two-sided markets and then show how the concepts can be applied for market definition and for analyzing monopolization and abuse of dominance cases.