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The Boundaries of the Platform: Vertical Integration and Economic Incentives in Mobile Computing

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  • Boudreau, Kevin
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    Abstract

    Research on the organization of systems industries generally takes the boundaries of platforms to be exogenously-determined artifacts, given by the nature of technology. This paper studies whether platform boundaries are responsive to economic incentives by studying variation in platform boundaries in competing systems in mobile computing. Using detailed descriptive evidence and systematically collected databases of integration patterns, I find that platform boundaries in this industry could be understood as established in response to three primary goals: 1) to consolidate control around assets that conferred the power to regulate production in the system as a whole; 2) to integrate economic activities that risked coordination problems; 3) to open platform boundaries in response to interactions with market competition.

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    File URL: http://hdl.handle.net/1721.1/30609
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    Bibliographic Info

    Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number 30609.

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    Date of creation: 13 Jan 2006
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    Handle: RePEc:mit:sloanp:30609

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    Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA
    Phone: 617-253-2659
    Web page: http://mitsloan.mit.edu/
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    Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA

    Related research

    Keywords: Platforms; systems competition; vertical integration; theory of the firm; information technology;

    This paper has been announced in the following NEP Reports:

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    1. Michael D. Whinston, 2003. "On the Transaction Cost Determinants of Vertical Integration," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(1), pages 1-23, April.
    2. Joseph Farrell and Michael L. Katz., 2000. "Innovation, Rent Extraction, and Integration in Systems Markets," Economics Working Papers E00-286, University of California at Berkeley.
    3. David S. Evans & Richard Schmalensee, 2005. "The economics of interchange fees and their regulation : an overview," Proceedings – Payments System Research Conferences, Federal Reserve Bank of Kansas City, issue May, pages 73-120.
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    11. Joseph Farrell & Philip J. Weiser, 2003. "Modularity, Vertical Integration, and Open Access Policies: Towards A Convergence of Antitrust and Regulation In The Internet Age," Industrial Organization 0303007, EconWPA.
    12. Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
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    15. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
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    19. repec:reg:wpaper:105 is not listed on IDEAS
    20. Steven J. Davis & Jack MacCrisken & Kevin M. Murphy, 2001. "Economic Perspectives on Software Design: PC Operating Systems and Platforms," NBER Working Papers 8411, National Bureau of Economic Research, Inc.
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    24. repec:reg:rpubli:105 is not listed on IDEAS
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