Two-Sided Market Literature Enriches Traditional Antitrust Analysis PDF Download

Author: William H. Rooney
Publisher:
ISBN:
Category :
Languages : en
Pages : 10

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Book Description
The term two-sided market sounds strange to the antitrust lawyer's ear. Antitrust markets typically are not described as having sides. They consist of a relevant product or set of products, cover a geographic area, and include transactions between buyers and sellers at a particular level of distribution (e.g., manufacturing, wholesale, retail). Although most market participants buy inputs and sell outputs, they usually buy in the market for the input and sell in the market for the output, not compete in a two-sided market.Still, the growing and informative literature on two-sided platforms, businesses, and markets has much to offer antitrust law. That literature emphasizes that the demand for otherwise distinct products or services may in fact be linked and that a competitive-effects analysis cannot myopically ignore that linkage. To the extent that the two-sided market literature improves competitive-effects analysis, it improves the fundamental purpose of antitrust law.This essay briefly discusses the importance of acknowledging linked demand for, and relationships among, otherwise distinct products or services, as recommended by the two-sided market literature, with respect to competitive-effects assessments and market definition. We also observe that recognizing linked demand and interrelationships among products or services facilitates the application of legal rules in antitrust cases.

Author: Renata B. Hesse
Publisher:
ISBN:
Category :
Languages : en
Pages : 6

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Book Description
It only takes working through a single matter that involves a two-sided market to recognize that the antitrust analysis can be a bit more complicated than with standard one-sided markets. The principle reason for the complication is evident from the descriptive moniker given these markets: they have two sides or, put more practically, they have two sets of independent customers. Generally, two-sided markets are characterized by(1) the presence of two distinct classes of customers for a vendor's product or service, both of which are necessary for the existence of the product or service, and(2) indirect positive externalities between different classes of customers, meaning that the value of the product or service to one class of customer increases with the level of usage by the other customer class, at least up to a point.But why do these features make a difference in terms of the application of standard antitrust principles to these markets? Or, more colloquially, why is everyone talking about two-sided markets?

Author: David S. Evans
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
"Two-sided" markets have two different groups of customers that businesses have to get on board to succeed - there is a "chicken-and-egg" problem that needs to be solved. These industries range from dating clubs (men and women), to video game consoles (game developers and users), to credit cards (cardholders and merchants), and to operating system software (application developers and users). They include some of the most important industries in the economy.Two-sided firms behave in ways that seem surprising from the vantage point of traditional industries, but in ways that seem like plain common sense once one understands the business problems they must solve. Prices do not and prices cannot follow marginal costs in each side of the market. Price levels, price structures, and investment strategies must optimize output by harvesting the indirect network effects available on both sides. By doing so, businesses in two-sided industries get both sides on board and solve the chicken-and-egg problem. There is no basis for asking regulators or antitrust enforcers to steer clear of these industries or to spend extra effort on them. The antitrust analysis of these industries, however should heed the economic principles that govern pricing and investment decisions in these industries.

Author: Ulrich Schwalbe
Publisher: Oxford University Press
ISBN: 0199571813
Category : Business & Economics
Languages : en
Pages : 477

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Book Description
Co-written by an expert lawyer and economist, this book provides a thorough guide to the economic theory behind the regulation of mergers. The economic theory is then used to analyse the current state of European competition law, and test the success of the European Commission's search for a 'more economic approach' to merger regulation.

Author: Alexei Alexandrov
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
This article extends antitrust analysis to two-sided markets in which a virtual monopolist competes with local bricks-and-mortar dealers. The discussion examines the market power of an Internet market maker as well as an Internet matchmaker. The analysis shows that equilibrium in a two-sided market can be characterized as a one-sided market in which transaction demand depends on the bid-ask spread of the central market maker. This allows for a straightforward extension of critical demand elasticity and critical loss analysis from one-sided markets to two-sided markets, with antitrust tests based on the hypothetical monopolist's bid-ask spread. Antitrust analysis of a one-sided market also carries over to a two-sided market with a matchmaker where antitrust tests are based on the sum of participation fees.

Author: Roger D. Blair
Publisher: Oxford University Press
ISBN: 0199859205
Category : Business & Economics
Languages : en
Pages : 633

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Book Description
More than any other area of regulation, antitrust economics shapes law and policy in the United States, the Americas, Europe, and Asia. In a number of different areas of antitrust, advances in theory and empirical work have caused a fundamental reevaluation and shift of some of the assumptions behind antitrust policy. This reevaluation has profound implications for the future of the field. The Oxford Handbook of International Antitrust Economics has collected chapters from many of the leading figures in antitrust. In doing so, this two volume Handbook provides an important reference guide for scholars, teachers, and practitioners. However, it is more than a merely reference guide. Rather, it has a number of different goals. First, it takes stock of the current state of scholarship across a number of different antitrust topics. In doing so, it relies primarily upon the economics scholarship. In some situations, though, there is also coverage of legal scholarship, case law developments, and legal policies. The second goal of the Handbook is to provide some ideas about future directions of antitrust scholarship and policy. Antitrust economics has evolved over the last 60 years. It has both shaped policy and been shaped by policy. The Oxford Handbook of International Antitrust Economics will serve as a policy and research guide of next steps to consider when shaping the future of the field of antitrust.

Author: Paolo Buccirossi
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 716

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Book Description
Experts examine the application of economic theory to antitrust issues in both the United States and Europe, discussing mergers, agreements, abuses of dominance, and the impact of market features. Over the past twenty years, economic theory has begun to play a central role in antitrust matters. In earlier days, the application of antitrust rules was viewed almost entirely in formal terms; now it is widely accepted that the proper interpretation of these rules requires an understanding of how markets work and how firms can alter their efficient functioning. The Handbook of Antitrust Economics offers scholars, students, administrators, courts, companies, and lawyers the economist's view of the subject, describing the application of newly developed theoretical models and improved empirical methods to antitrust and competition law in both the United States and the European Union. (The book uses the U.S. term “antitrust law” and the European “competition law” interchangeably, emphasizing the commonalities between the two jurisdictions.) After a general discussion of the use of empirical methods in antitrust cases, the Handbook covers mergers, agreements, abuses of dominance (or unilateral conducts), and market features that affect the way firms compete. Chapters examine such topics as analyzing the competitive effects of both horizontal and vertical mergers, detecting and preventing cartels, theoretical and empirical analysis of vertical restraints, state aids, the relationship of competition law to the defense of intellectual property, and the application of antitrust law to “bidding markets,” network industries, and two-sided markets. Contributors Mark Armstrong, Jonathan B. Baker, Timothy F. Bresnahan, Paulo Buccirossi, Nicholas Economides, Hans W. Friederiszick, Luke M. Froeb, Richard J. Gilbert, Joseph E. Harrington, Jr., Paul Klemperer, Kai-Uwe Kuhn, Francine Lafontaine, Damien J. Neven, Patrick Rey, Michael H. Riordan, Jean-Charles Rochet, Lars-Hendrick Röller, Margaret Slade, Giancarlo Spagnolo, Jean Tirole, Thibaud Vergé, Vincent Verouden, John Vickers, Gregory J. Werden

Author: Einer Elhauge
Publisher: Edward Elgar Publishing
ISBN: 0857938096
Category : Law
Languages : en
Pages : 425

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Book Description
One might mistakenly think that the long tradition of economic analysis in antitrust law would mean there is little new to say. Yet the field is surprisingly dynamic and changing. The specially commissioned chapters in this landmark volume offer a rigorous analysis of the field's most current and contentious issues. Focusing on those areas of antitrust economics that are most in flux, leading scholars discuss topics such as: mergers that create unilateral effects or eliminate potential competition; whether market definition is necessary; tying, bundled discounts, and loyalty discounts; a new theory of predatory pricing; assessing vertical price-fixing after Leegin; proving horizontal agreements after Twombly; modern analysis of monopsony power; the economics of antitrust enforcement; international antitrust issues; antitrust in regulated industries; the antitrust-patent intersection; and modern methods for measuring antitrust damages. Students and scholars of law and economics, law practitioners, regulators, and economists with an interest in industrial organization and consulting will find this seminal Handbook an essential and informative resource.

Author: David Sparks Evans
Publisher:
ISBN:
Category : Antitrust law
Languages : en
Pages : 27

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Book Description
This article examines antitrust analysis when one of the possible subject products of an antitrust or merger is ordinarily offered at a zero price. It shows that businesses often offer a product for free because it increases the overall profits they can earn from selling the free product and a companion product to either the same customer or different customers. The companion product may be a complement, a premium version of the free product, or the product on the other side of a two-sided market. The article then shows how antitrust and merger analysis should proceed when the subject is either the free product or the companion product. A key point is that the existence of a free good signals that there is a companion good, that firms consider both products simultaneously in maximizing profit, and that commonly used methods of antitrust analysis, including market definition, probably need to be adjusted to properly analyze two inextricably linked products. When antitrust or merger analysis involves a free product, the analysis of consumer welfare and injury also needs to account for customers of both the free product and its companion product since any change in market conditions for customers of one product affects the customers of the other product. Much of the analysis of the article is also relevant to other common situations in which price is set less than marginal cost.

Author: Saattvic Saattvic
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Book Description
With recent advances in technology, more and more of the world is being connected to the internet, at progressively faster speeds. Piggy-backing on this increasing penetration are a swarm of new products and services, who seek to create value by playing intermediary - connecting different groups of people and facilitating interactions that would otherwise have been impossible, or at least very costly. This paper provides an overview of the economic literature on multi-sided platforms, with a focus on literature examining antitrust issues in the multi-sided context, and summarises key insights that can help antitrust authorities and other practitioners better understand and analyse competition issues in platform markets. The paper contains two broad parts. The first, consisting of Sections 2 and 3, articulates the economics of multi-sided platforms: Section 2 defines and categorises multi-sided platforms; and Section 3 briefly lays out key economic results, both static and dynamic. The remainder of the paper examines the implications of these results on all various kinds of antitrust analyses: Section 4 focusses on market definition; Section 5 on assessing market power; Section 6 on merger analysis; Section 7 on the analysis of coordinated behaviour; and Section 8 on abuse of dominance analysis. Section 9 concludes.