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Platforms and network effects

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

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  • 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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    References listed on IDEAS

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    More about this item

    Keywords

    Economics and Finance;

    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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