Quote:
Originally Posted by jefferyepayne
Ok, I've read the research report. The whole purpose of this research is to empirically explore the validity of what is called a two-sided market (i.e. one in which buyers and sellers are charged a fee by an intermediary). The premise of this report is that card shows (pre-internet) provide a great two-sided market to study as the fees associated with card shows are simplistic, making it easy to do data analysis on.
The results of the study validate several aspects of two-sided market theory:
1. As competition increases, prices do not necessarily reduce. For card shows, competition results in decreases on the consumer side but not on the dealer side. In fact, in some cases, dealer prices increased in the face of competition.
2. The side of the market that sees the most price decrease due to competition is the side that typically does not move between competitors as freely. Consumers tend to frequent particular shows they like irrespective of others that pop up while dealers will try to attend as many as they can afford in order to reach new customers.
I guess this is fine theoretical research about two-sided markets but doesn't really give any insights into the card industry at all. Clearly the internet has had a far greater impact on the card industry than any dynamics associated with two-sided markets and this research doesn't discuss / address this dynamic at all.
jeff
|
Jeff, thanx for putting the paper into layman's terms. I looked at the paper but couldn't make any sense of it.