Topic 7 multi sided platforms
1 / 35

Topic 7: Multi-Sided platforms - PowerPoint PPT Presentation

  • Uploaded on

A ntitrust Economics 2013. David S. Evans University of Chicago, Global Economics Group. Elisa Mariscal CIDE, ITAM, CPI. Topic 7: Multi-Sided platforms. Topic 7 | Part 2 23 May 2013. Date. Overview. Maximizing Value. Platform Maximizes Value .

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' Topic 7: Multi-Sided platforms' - wells

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Topic 7 multi sided platforms

Antitrust Economics 2013

David S. Evans

University of Chicago, Global Economics Group

Elisa Mariscal


Topic 7: Multi-Sided platforms

Topic 7 | Part 2 23 May 2013


How p latforms i nternalize n etwork e ffects
How platforms internalize network effects

Platforms harness e xternalities
Platforms harness externalities

Platform design and rules p romote p ositive e xternalities
Platform design and rules promote positive externalities

Governance mitigates n egative e xternalities
Governance mitigates negative externalities

Welfare effects of rules
Welfare effects of rules

Tentative examples of multi homing
Tentative examples of multi-homing

Payment Cards:

People use several and merchants accept many

Software Platforms:

People use one per device and developers write for several

Advertising Supported Media:

Advertisers rely on several and people read several

Pricing strategies
Pricing Strategies

Rules of thumb for pricing s tructure
Rules of thumb for pricing structure

Software p latforms and pricing
Software platforms and pricing

Youtube ignited in late 2005
YouTube ignited in late 2005

Platforms need c ritical m ass to ignite
Platforms need critical mass to ignite

Successful launch r equires c ritical m ass
Successful launch requires critical mass

Critical mass corresponds to a combination of scale and balance that is minimally sufficient to ignite the platform

Critical mass platform i gnition and g rowth
Critical mass, platform ignition and growth

In this example the critical mass points are between C’ and C”.

C* is the point that would lead to optimal platform launch.

Points to the NW of the vector 0-C’ and to the SW of vector 0-C” would result result in platform implosion.

Side A

Three phases of platform g rowth
Three phases of platform growth

Some platforms can secure precommitments from both sides and

thereby collapse initiation and ignition into immediate growth at


Initiation and getting to critical m ass
Initiation and getting to critical mass

Platform competition
Platform Competition

The myspace monopoly
The MySpace “Monopoly




2011 Social Network Analysis Report,

“We see MySpace as the new MTV, with one crucial difference: the users are the stars.”

“MySpace is far and away the de facto standard for social networking and is highly entrenched in the youth culture of today.”



The long-lived Windows dominance on PCs is (was?) the exception to the rule that platform markets usually aren’t winner take all.

Determinations of competition
Determinations of competition

In practice most multi-sided industries have several competing differentiated MSPs, Scale and indirect network effects don’t result in market tipping to monopoly usually.

Determinants of industry s tructure
Determinants of industry structure

Symmetric vs asymmetric c ompetition
Symmetric vs. asymmetric competition

Examples of asymmetric c ompetition
Examples of asymmetric competition