Tuesday, February 14, 2012
Posted by D. Daniel Sokol
Emilio Calvano (Boconni) and Bruno Jullien (Toulouse) have written on Issues in on-line advertising and competition policy: a two-sided market perspective.
ABSTRACT: Although theories of platform competition are not specific to the Internet, they shed light on most of the basic trade-offs faced by Internet platforms and will be used here to set the stage. These theories contrast market outcomes with efficient (i.e. welfare-maximizing) outcomes under various market configurations and governance structures. Accordingly in what follows we first discuss competition policy issues specific to two-sided intermediation that are relevant for advertising markets in general. We then turn to those aspects inherent to the on-line world that we believe can potentially lead to new intuitions or deserve specific treatment.