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Innovation and competition in two-sided markets: the case of payment systems


  • Armando Calabrese
  • Massimo Gastaldi
  • Irene Iacovelli
  • Nathan Levialdi Ghiron


This paper proposes a model which analyses the role of technological innovation in the competitiveness and efficiency of the payment system industry. The performance of this industry is described through the use of a mathematical model and the strategies of platforms are analysed considering the role of technological innovation. The paper shows how technological development is the most common competitive strategy in an oligopolistic market of payment platforms. Moreover, the paper shows that these platforms can develop product/service innovations or price differentiations in order to deal with market competition effectively.

Suggested Citation

  • Armando Calabrese & Massimo Gastaldi & Irene Iacovelli & Nathan Levialdi Ghiron, 2008. "Innovation and competition in two-sided markets: the case of payment systems," International Journal of Management and Network Economics, Inderscience Enterprises Ltd, vol. 1(1), pages 1-20.
  • Handle: RePEc:ids:ijmnec:v:1:y:2008:i:1:p:1-20

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