Antitrust & Competition Policy Blog

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

Friday, December 7, 2012

The Antitrust Analysis of Multi-Sided Platform Businesses

Posted by D. Daniel Sokol

David S. Evans, University of Chicago Law School, University College London, Global Economics Group and Richard Schmalensee, Massachusetts Institute of Technology (MIT) - Sloan School of Management, National Bureau of Economic Research (NBER) have posted the best literature review ever of two sided markets, The Antitrust Analysis of Multi-Sided Platform Businesses.

ABSTRACT: This Chapter provides a survey of the economics literature on multi-sided platforms with particular focus on competition policy issues, including market definition, mergers, monopolization, and coordinated behavior. It provides a survey of the general industrial organization theory of multi-sided platforms and then considers various issues concerning the application of antitrust analysis to multi-sided platform businesses. It shows that it is not possible to know whether standard economic models, often relied on for antitrust analysis, apply to multi-sided platforms without explicitly considering the existence of multiple customer groups with interdependent demand. It summarizes many theoretical and empirical papers that demonstrate that a number of results for single-sided firms, which are the focus of much of the applied antitrust economics literature, do not apply directly to multi-sided platforms.

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