An Institutional Perspective on Two-sided Networks

In the early 2000s, the term ‘two-sided network’ has been coined to describe a form of organizing economic activities related to novel uses of information technology. While it is evident that two-sided networks make use of the novel possibilities of information technologies to organize economic activities, they have not yet been studied from an institutional perspective to shed light on the nature of this phenomenon. We suggest a way to remedy this situation by developing a novel classification scheme to systematically describe institutionally distinct forms of two-sided networks. We find that the phenomenon of two-sided networks may herald an entirely new way of organizing economic activities, possibly replacing, or evolving from, traditional forms. Moreover, within certain limits, there may be substitutive relationships between forms of two-sided networks which suggests that there are alternatives to forms which currently dominate the public and academic attention and which may be more desirable.