A New Approach to Analyze the Structure and Developments of
The size and the rapid changes of markets make it increasingly difficult to determine the structure of markets. Yet, such knowledge is crucial for firms and regulators who need to know (i) how to define a market, (ii) who are the firms on a market, (iii) how important is each firm on the market, (iv) which firms compete against each other and (v) how markets develop. We propose a new approach to derive the structure and development of markets. It uses a new data source, namely the organic results of a search engine, and models that easily enable to repeat the market structure analysis over time for markets, sub-markets and egocentric markets in many industries. Two empirical studies, one in the retail banking market with and one in the IT security market, each with several hundred of firms, illustrate the usefulness of the new approach.
Bernd Skiera is a Professor of Electronic Commerce at Goethe-Universität Frankfurt am Main, Germany