Tuesday, November 8, 2011
Posted by D. Daniel Sokol
Denis Lescop, TELECOM Business School and Elena De Vogeleer, Telecom Business School discuss Firm/Market Equivalency: Determinants and Effects on Industry Dynamics.
ABSTRACT: Today's firm is a complex nexus of interactions, which it facilitates and regulates; it supports market activity by providing the participants with basic resources. Market failures form the foundation of this phenomenon; they create business opportunities that firms address through market support strategy. The concept of firm/market equivalency introduced here integrates an economics and a management strand of literature: multi-sided markets and business ecosystems & platforms. We address firm/market equivalency through concepts of interactions and gravity, i.e. density of firm's external interactions. We then apply these concepts to a case study and discuss implications of firm/market equivalency for antitrust policy.