Technology Entrepreneurship and Lean Startups - Reading Reflection

The Economics of Two-Sided Markets – Marc Rysman

Mustafa Degerli - MD

Page 1 of 2

In this paper, I provide my summary and reflections as bulleted items on behalf of the “The

Economics of Two-Sided Markets” article by Marc Rysman.

As underlined in the pertinent text, two-sided and even more multi-sided markets are realities

of today’s economy and business cases especially in the context of technology organizations.

The subject paper legitimately aims to elaborate the details of the concept and applications of

economics of two-sided markets, and the main justification for some economists to be keen

on these.

One important and decent example, to me, given in the writing is about the Amazon.com case

where both one-sided and two-sided selling strategies are present alongside. This clarifies the

point that we don’t have to be either one-sided or two-sided. Alternatively, based on the needs,

contexts, and realities, we can arrange a system where we can advantageously exploit and

derive benefit from both of these approaches (one-sided and two-sided).

Naturally, as noted in the relevant manuscript, intermediaries are the actual actors that make

two-sided markets or two-sided strategies promising. Accordingly, the importance and

influence of the intermediaries is a major issue in two-sided markets or two-sided strategies.

Still another important point made in the article flawless is the true relations of twos-sided

markets or two-sided strategies and network effects. We can practically examine the two-

sided markets or two-sided strategies in network effects frameworks. That is to say, two-sided

markets or two-sided strategies can be analysed and studied in a very subset of network effects

literature.

The subject paper objectively defined and highlights the tree foremost categories for

miscellaneous kinds of technologies and business models wherein two-sided markets are truly

imperative. These are: Newspapers and media, payment cards, and operating systems. As

made properly sound in the pertinent manuscript, these are very typical instances where

intermediaries play a noteworthy role both on behalf of business model and money-making.

Pricing, openness, innovation, advertising, and quality investment disputes are the leading

strategies and issues that each of key actors of two-sided markets shall rigorously should take

into consideration. Predominantly, the pricing and openness mean a great deal, as pointed out

in the article. The motive for these is unquestionably the fuzziness and by some means

involvedness of business models and operations which take place in the context of two-sided

markets.

Without doubt, pricing, openness, innovation, advertising, and quality investment topics are

also reasonably outstanding and fairly promising issues for one-sided, quite typical markets

and settings, but then again these become much more essential and prominent in consequence

of the landscape of two-sided markets where the associations and settings develop fairly more

wide-ranging and somehow more multifaceted.

Technology Entrepreneurship and Lean Startups - Reading Reflection

The Economics of Two-Sided Markets – Marc Rysman

Mustafa Degerli - MD

Page 2 of 2

Here the important thing is of course that each of these strategies related with pricing,

openness, innovation, advertising, and quality investment focusses ought to be designated,

tailored, and applied by intention and with a deliberate consideration while taking into account

the varying characteristics and dynamics of organizations and business models.

Furthermore, the subject paper impartially discusses the antitrust and regulation issues within

the context of public policy. These are accurately significant issues principally on behalf of

the two-sided and multi-sided markets as they naturally create more complicated issues related

with antitrust and regulation. For instance, as exemplified in the pertinent writing, in two-

sided and multi-sided markets, there is a much likelihood that there will be a single dominant

platform and this will be of interest to antitrust authorities. Definitely, it is reasonably

customary that for the multi-sided markets there is the ambiguous role of the economics.

The author’s conclusion of that two-sided analysis will grow in significance in areas where

pricing analysis is important is to a certain extent thought-provoking and promising. To be

precise, regarding antitrust within the context of public policy two-sided analysis and pricing

analysis are the two hot topics to work and elaborate on for further development and

exploitation.

What is more, as pointed out in the relevant text, regulation concerns within the context of

public policy is correspondingly central as we can’t practically establish and maintain a well-

working two-sided and multi-sided market lacking the exclusive contribution of relevant well-

established and maintained regulations. As I highlighted before in this writing, working in

two-sided and multi-sided markets are more complex and comprehensive, and this upsurges

the essence and importance of regulations as they determine the ground-rules and all-purpose

processes. Within the context of public policy, regulation issues shall be taken into account

with excessive dedication and detail on the way to establish, maintain, and most importantly

regulate the very nature and dynamics of two-sided and multi-sided markets.

For myself, the pertinent article is reasonably of assistance to see and fairly understand the

dynamics of economics of two-sided and multi-sided markets. Personally, I liked the detailed

examples given by the author. On the other hand, to me, the author’s conclusions are not that

unique or original. By just looking at the pertinent literature, we can easily conclude the results

drawn by the author. Examples were to a certain extent detailed and somehow original to me,

yet in my opinion, the subject article is quite half-finished without a more detailed discussion

of applications and measures related with antitrust and regulation issues within the context of

public policy for different countries. Moreover, the text may have been more influential and

far-reaching with a detailed discussion of how certain instruments like pricing, openness,

innovation, advertising, and quality investment should be handled especially for two-sided

markets.