One-sided Logic in Two-sided Markets

In this paper, I consider eight basic fallacies that can arise from using conventional wisdom from one-sided markets in two-sided market settings. These fallacies are illustrated using statements made in the context of regulatory investigations into credit card schemes in Australia and the United Kingdom. I discuss how these fallacies may be reconciled by proper use of a two-sided market analysis, making reference to the relevant economics literature where applicable. The analysis is supported by observations on other two-sided markets.