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Platforms and network effects

In: Handbook of Game Theory and Industrial Organization, Volume II

Author

Listed:
  • Paul Belleflamme
  • Martin Peitz

Abstract

In many markets, user benefits depend on participation and usage decisions of other users, giving rise to network effects. Intermediaries manage these network effects and thus act as platforms that bring users together. This chapter reviews key findings from the literature on network effects and two-sided platforms. It lays out the basic models of monopoly platforms and platform competition, and elaborates on some routes taken by recent research.

Suggested Citation

  • Paul Belleflamme & Martin Peitz, 2018. "Platforms and network effects," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 11, pages 286-317, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:17978_11
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    Cited by:

    1. Bott, Johanna & Arnold, René & Hildebrandt, Christian, 2018. "Die Nutzung von Daten durch OTT-Dienste zur Abschöpfung von Aufmerksamkeit und Zahlungsbereitschaft: Implikationen für Daten- und Verbraucherschutz," WIK Discussion Papers 431, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    2. Zygmuntowski, Jan J. & Zoboli, Laura & Nemitz, Paul, 2021. "Embedding European values in data governance: A case for public data commons," Internet Policy Review: Journal on Internet Regulation, Alexander von Humboldt Institute for Internet and Society (HIIG), Berlin, vol. 10(3), pages 1-29.
    3. Wu, Wenqing & Huang, Xuan & Wu, Chia-Huei & Tsai, Sang-Bing, 2022. "Pricing strategy and performance investment decisions in competitive crowdfunding markets," Journal of Business Research, Elsevier, vol. 140(C), pages 491-497.
    4. Krämer, Jan & Peitz, Martin, 2018. "A fresh look at zero-rating," Telecommunications Policy, Elsevier, vol. 42(7), pages 501-513.
    5. Shekhar, Shiva, 2022. "Platform pricing choice : Exclusive deals or uniform prices," Other publications TiSEM 591d4e4d-f618-49bd-986f-c, Tilburg University, School of Economics and Management.
    6. Shekhar Shiva, 2021. "Platform Pricing Choice: Exclusive Deals or Uniform Prices," Review of Network Economics, De Gruyter, vol. 20(3), pages 159-186, September.
    7. Oriol, Nathalie & Rufini, Alexandra & Torre, Dominique, 2018. "Fifty-shades of grey: Competition between dark and lit pools in stock exchanges," Information Economics and Policy, Elsevier, vol. 45(C), pages 68-85.
    8. Hildebrandt, Christian & Arnold, René, 2018. "Marktbeobachtung in der digitalen Wirtschaft – Ein Modell zur Analyse von Online-Plattformen," WIK Discussion Papers 427, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    9. Afilipoaie, Adelaida & Donders, Karen & Ballon, Pieter, 2022. "The European Commission's approach to mergers involving software-based platforms: Towards a better understanding of platform power," Telecommunications Policy, Elsevier, vol. 46(5).
    10. Kroon, Peter & Arnold, René, 2018. "Die Bedeutung von Interoperabilität in der digitalen Welt – Neue Herausforderungen in der interpersonellen Kommunikation," WIK Discussion Papers 437, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    11. Shekhar, Shiva & Shopova, Radostina, 2025. "The limits of media see-saws: Ad-funded platform mergers can harm both sides," Economics Letters, Elsevier, vol. 254(C).
    12. Gaëlle Baudry & Papa Alioune Ba & Youssef Miloudi, 2023. "Entre défis organisationnels, sociaux et techniques pour la production de la ville : de la plateformisation des services à l'usager vers la transversalité des échanges," Post-Print hal-03969467, HAL.
    13. Stephen Jarman & Deniz D. Karaman Örsal, 2020. "The regulation of zero-price markets by the competition authorities in the USA and the EU," Competition and Regulation in Network Industries, , vol. 21(4), pages 315-343, December.
    14. Arnold, René & Schneider, Anna & Lennartz, Jonathan, 2020. "Interoperability of interpersonal communications services – A consumer perspective," Telecommunications Policy, Elsevier, vol. 44(3).
    15. Iñigo Herguera, 2021. "Competencia y regulación de (algunas) plataformas digitales en la UE," Working Papers 2021-10, FEDEA.
    16. Bertani, Filippo & Ponta, Linda & Raberto, Marco & Teglio, Andrea & Cincotti, Silvano, 2021. "The complexity of the intangible digital economy: an agent-based model," Journal of Business Research, Elsevier, vol. 129(C), pages 527-540.

    More about this item

    Keywords

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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