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Market Definition of Platform Markets


  • Dewenter, Ralf

    () (Helmut Schmidt University, Hamburg)

  • Heimeshoff, Ulrich

    () (Düsseldorf Institute for Competition Economics)

  • Löw, Franziska

    () (Helmut Schmidt University, Hamburg)


Platform markets are characterized by the existence of indirect network effects that connect two or more market sides through a platform that internalizes these feedback effects. Conventional instruments of market definitions which consider price levels cannot easily applied in case of two-sided platform competition, as price structure of those markets are non-neutral. Instead of using prices, we use time series of quantities and simple correlation analysis to evaluate the substitutional relationship within two-sided media markets. As a benchmark model, we simulate a Cournot duopoly on order to calculate correlation coefficients for varying degrees of product differentiation and indirect network effects.

Suggested Citation

  • Dewenter, Ralf & Heimeshoff, Ulrich & Löw, Franziska, 2017. "Market Definition of Platform Markets," Working Paper 176/2017, Helmut Schmidt University, Hamburg.
  • Handle: RePEc:ris:vhsuwp:2017_176

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    References listed on IDEAS

    1. Gambaro, Marco & Puglisi, Riccardo, 2015. "What do ads buy? Daily coverage of listed companies on the Italian press," European Journal of Political Economy, Elsevier, vol. 39(C), pages 41-57.
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    3. Tim Groseclose & Jeffrey Milyo, 2005. "A Measure of Media Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1191-1237.
    4. Thomas Eisensee & David Strömberg, 2007. "News Droughts, News Floods, and U. S. Disaster Relief," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 693-728.
    5. Garz, Marcel, 2013. "Unemployment expectations, excessive pessimism, and news coverage," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 156-168.
    6. Rodrigo Taborda, 2013. "Bias in Economic News: The Reporting of Nominal Exchange Rate Behavior in Colombia," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2013), pages 103-153, August.
    7. Marcel Garz, 2014. "Good news and bad news: evidence of media bias in unemployment reports," Public Choice, Springer, vol. 161(3), pages 499-515, December.
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    More about this item


    two-sided markets; market definition; printed media; network effects;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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