Towards a theory of platform dynamics
| Autor: | Luis M. B. Cabral |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Economics and Econometrics
Stationary distribution Computer science Strategy and Management 05 social sciences Contrast (statistics) General Business Management and Accounting Dynamics (music) Management of Technology and Innovation 0502 economics and business Econometrics 050207 economics Versa 050203 business & management Externality |
| Zdroj: | Journal of Economics & Management Strategy. 28:60-72 |
| ISSN: | 1058-6407 |
| DOI: | 10.1111/jems.12312 |
| Popis: | I introduce a dynamic framework to analyze platforms. The (single) platform owner sets prices at the beginning of each period. Agents (buyers, sellers, readers, consumers, merchants, etc.) make platform membership decisions occasionally. I show that an optimal platform pricing addresses two externalities: across sides and across time periods. This results in optimal prices which depend on platform size in a nontrivial way. By means of numerical simulations, I examine the determinants of equilibrium platform size, showing that the stationary distribution of platform size may be bimodal, that is, with some probability the platform remains very low or takes very long to increase in size. I also contrast the dynamics of proprietary versus nonproprietary (i.e., zero‐priced) platforms, and consider the specific case of asymmetric platforms (one side cares about the other but not vice versa). |
| Databáze: | OpenAIRE |
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