A theory of two-zoned networks for platform-mediated markets

Two-sided networks are a critical component in the present digital economy powered by the advances of information technology. Researchers have investigated the economic and strategic implications from this emerging platform-mediated market structure. While many interesting questions have been studied both theoretically and practically, we observe some real-world cases that cannot be fully explained by the traditional framework. A more comprehensive framework is thus needed to reflect the broader market structure and the underlying market dynamics. We propose the framework of two-zoned networks by adding the "zone" dimension at a higher layer to study two-zoned networks which include two-sided networks as a special case. The core platform serves both as the connection of two-sided markets and as the nexus of the two zones. Four real-world cases are then analyzed using this proposed framework to draw implications before topics are identified for future research.