Firms operating in two-sided markets have to integrate in their optimal pricing structure the existence of indirect externalities across groups of consumers. Beyond direct externalities network effects,such markets are characterized by the increasing value of the platform for the users on one...

Research on capital structure attempts to explain how corporations finance real investment, with particular emphasis on the proportions of debt vs. equity financing. There is no universal theory of the debt-equity choice, and no reason to expect one. But three useful conditional theories are...

We analyze the central economic issues raised by U.S. v Microsoft. Network effects and economies of scale in applications programs created a barrier to entry for new operating system competitors, which the combination of Netscape Navigator and the Java programming language potentially could have...

The emergence of cloud computing is promising enormous benefits for small businesses, due to the dramatic reduction in IT costs caused by the service-oriented architecture. At the same time, the transition to a cloud ecosystem is more controversial for individual end users, as emerging business...

This paper examines the competitive actions taken by Microsoft in its "browser war" with Netscape, most importantly Microsoft's decisions to give away Explorer free of charge, integrate Explorer into its dominant Windows operating system and pay online service providers for exclusive...

We study optimal cartel prices in a two-sided market. We present a simple model showing that prices above the two-sided monopoly price may prevail on one side of a two-sided market as a means to enhance the sustainability of the cartel. We prove that in such a case a higher benefit from the...

This paper discusses the general characteristics of online markets from a competition theory perspective and the implications for competition policy. Three important Internet markets are analyzed in more detail: search engines, online auction platforms, and social networks. Given the high level...