Estimating Network Effects in Two-Sided Markets Without Data on Prices and Quantities

2012 ◽  
Author(s):  
Thomas Hildebrand
Keyword(s):  
Network Effects ◽  
Two Sided Markets

scholarly journals Estimating Network Effects in Two-Sided Markets

2020 ◽  
Vol 37 (1) ◽  
pp. 12-38 ◽  
Author(s):  
Oliver Hinz ◽  
Thomas Otter ◽  
Bernd Skiera
Keyword(s):  
Network Effects ◽  
Two Sided Markets

Marktplätze und indirekte Netzwerkeffekte

2006 ◽  
Vol 7 (3) ◽  
pp. 317-333 ◽  
Author(s):  
Martin Peitz
Keyword(s):  
Real World ◽  
Competition Policy ◽  
Network Effects ◽  
Numerical Examples ◽  
Indirect Network Effects ◽  
World Markets ◽  
Two Sided Markets

AbstractThis paper reviews the nascent literature on „two-sided markets“ which can be characterized by two-sided indirect network effects. It presents key findings in this literature, derives some of them in numerical examples and discusses how these findings improve our understanding of real-world markets. It finally discusses some implications for competition policy.

scholarly journals A Contest Model of a Professional Sports League with Two-Sided Markets

2012 ◽  
Vol 232 (3) ◽  
Author(s):  
Helmut Dietl ◽  
Tobias Duschl ◽  
Egon Franck ◽  
Markus Lang
Keyword(s):  
Network Effects ◽  
Network Externalities ◽  
Team Sports ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Market Potential ◽  
Competitive Balance ◽  
Professional Team Sports ◽  
Negative Effect ◽  
Two Sided Markets

SummaryThis paper develops a model of a professional sports league with network externalities by integrating the theory of two-sided markets into a two-stage contest model. In professional team sports, the competition of the clubs functions as a platform that enables sponsors to interact with fans. In these club-mediated interactions, positive network effects operate from the fan market to the sponsor market, while positive or negative network effects operate from the sponsor market to the fan market. We show that the size of these network effects determines the level of competitive balance within the league. If the market potential of the sponsors is small (large), competitive balance increases (decreases) with stronger combined network effects. We further deduce that clubs benefit from stronger combined network effects through higher profits and that network externalities can mitigate the negative effect of revenue sharing on competitive balance. Finally, we derive implications for improving competitive balance by taking advantage of network externalities. For example, our model suggests that an increase in the market potential of sponsors produces a more balanced league.

scholarly journals A Dynamic Contest Model of Platform Competition in Two-Sided Markets

2021 ◽  
Vol 16 (6) ◽  
pp. 2091-2109
Author(s):  
Martin Grossmann ◽  
Markus Lang ◽  
Helmut M. Dietl
Keyword(s):  
Head Start ◽  
Cost Efficiency ◽  
Network Effects ◽  
Future Success ◽  
Technological Advantage ◽  
Market Dominance ◽  
Underlying Causes ◽  
Convex Costs ◽  
Carry Over ◽  
Two Sided Markets

This paper examines the dynamic competition between platform firms in two-sided markets with network externalities. In our model, two platforms compete with each other via a contest to dominate a certain market. If one platform wins the contest, it can serve the market for a certain duration as a monopolistic platform. Our paper shows that platform firms can compensate for cost disadvantages with network effects. A head start (e.g., technological advantage) does not guarantee future success for platform firms. Network effects and cost efficiency are decisive for future success. Interestingly, higher costs of a platform can induce higher platform profits in our dynamic model. Moreover, we find that a platform’s size and profit are not necessarily positively correlated. Our model also provides new insights with respect to the underlying causes for the emergence of market dominance. The combination of technological carry-over and network effects can explain a long-lasting dominance of a platform that benefits from a head start. The necessary preconditions for this emergence are convex costs, small network effects and high carry-over.

Two-sided markets

2006 ◽  
Vol 3 (2) ◽  
pp. 57-63 ◽  
Author(s):  
Ralf Dewenter
Keyword(s):  
Zweiseitige Märkte ◽  
Two Sided Markets

Seit einiger Zeit wird in der Medienliteratur der Begriff der „two-sided markets“ (auch zweiseitige Märkte genannt) verwendet und vor allem in jüngster Vergangenheit hat die Anzahl der wissenschaftlichen Beiträge und Konferenzen zu diesem Thema deutlich zugenommen. Was ist genau unter diesem Begriff zu verstehen? Welche Besonderheiten weisen zweiseitige Märkte auf? Und welche medienökonomischen Implikationen lassen sich für diese Märkte ableiten? Um diese Fragen zu beantworten, werden im Folgenden das Prinzip der zweiseitigen Märkte am Beispiel von Medienmärkten erläutert und einige Besonderheiten dieser Märkte dargestellt.

Sign in / Sign up

Export Citation Format

Share Document