TY - JOUR
T1 - The analysis of mergers that involve multisided platform businesses
AU - Evans, David S.
AU - Noel, Michael D.
N1 - Funding Information:
This research was carried out as part of a Canadian Space Agency’s Science and Operational Applications Research (SOAR) Program project and was supported by the Minnesota Environment and Natural Resources Trust Fund and the Minnesota Department of Natural Resources. Special thanks are due to Brian Huberty of the U.S. Fish and Wildlife Service and Steve Kloiber of the Minnesota Department of Natural Resources, who initiated collaboration with the Canada Centre for Remote Sensing and secured project funding. The authors gratefully acknowledge the helpful comments of this paper’s two reviewers.
PY - 2008
Y1 - 2008
N2 - A multisided platform (MSP) serves as an intermediary for two or more groups of customers who are linked by indirect network effects. Recent research has found that MSPs are significant in many industries and that some standard economic results - such as the Lerner Index - do not apply to them, in material ways, without some significant modification to take linkages between the multiple sides into account. This article extends several key tools used for the analysis of mergers to situations in which one or more of the suppliers are MSPs. It shows that the application of traditional tools to mergers involving MSPs results in biases, the direction of which depends on the particular tool being used and other conditions. It also extends these tools to the analysis of the merger of MSPs. The techniques are illustrated with an application to an acquisition involving the multisided online advertising industry.
AB - A multisided platform (MSP) serves as an intermediary for two or more groups of customers who are linked by indirect network effects. Recent research has found that MSPs are significant in many industries and that some standard economic results - such as the Lerner Index - do not apply to them, in material ways, without some significant modification to take linkages between the multiple sides into account. This article extends several key tools used for the analysis of mergers to situations in which one or more of the suppliers are MSPs. It shows that the application of traditional tools to mergers involving MSPs results in biases, the direction of which depends on the particular tool being used and other conditions. It also extends these tools to the analysis of the merger of MSPs. The techniques are illustrated with an application to an acquisition involving the multisided online advertising industry.
UR - http://www.scopus.com/inward/record.url?scp=54049095954&partnerID=8YFLogxK
U2 - 10.1093/joclec/nhn017
DO - 10.1093/joclec/nhn017
M3 - Article
AN - SCOPUS:54049095954
SN - 1744-6414
VL - 4
SP - 663
EP - 695
JO - Journal of Competition Law and Economics
JF - Journal of Competition Law and Economics
IS - 3
ER -