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A Survey Of The Economic Role Of Software Platforms In Computer - Based Industries

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  • DAVID S. EVANS
  • ANDREI HAGIU
  • RICHARD SCHMALENSEE

Abstract

Software platforms are a critical component of the computer systems underpinning leading-edge products ranging from third-generation mobile phones to video games. After describing some key economic features of computer systems and software platforms, the paper presents case studies of personal computers, video games, personal digital assistants, smart mobile phones, and digital content devices. It then compares several economic aspects of these businesses including their industry evolution, pricing structures, and degrees of integration.

Suggested Citation

  • David S. Evans & Andrei Hagiu & Richard Schmalensee, 2004. "A Survey Of The Economic Role Of Software Platforms In Computer - Based Industries," Discussion papers 04032, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:04032
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    File URL: https://www.rieti.go.jp/jp/publications/dp/04e032.pdf
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    References listed on IDEAS

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    1. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    2. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    3. 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.
    4. Yannis Bakos & Erik Brynjolfsson, 1999. "Bundling Information Goods: Pricing, Profits, and Efficiency," Management Science, INFORMS, vol. 45(12), pages 1613-1630, December.
    5. Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
    6. David S. Evans & Michael A. Salinger, 2008. "THE ROLE OF COST IN DETERMINING WHEN FIRMS OFFER BUNDLES -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 143-168, March.
    7. David S. Evans & Richard Schmalensee, 2002. "Some Economic Aspects of Antitrust Analysis in Dynamically Competitive Industries," NBER Chapters,in: Innovation Policy and the Economy, Volume 2, pages 1-50 National Bureau of Economic Research, Inc.
    8. Michael R. Baye & John Morgan, 2001. "Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets," American Economic Review, American Economic Association, vol. 91(3), pages 454-474, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Andras Niedermayer, 2006. "Does a Platform Monopolist Want Competition?," Diskussionsschriften dp0604, Universitaet Bern, Departement Volkswirtschaft.
    2. Michael Vogelsang, 2010. "Dynamics of two-sided internet markets," International Economics and Economic Policy, Springer, vol. 7(1), pages 129-145, May.
    3. Andrei Hagiu, 2004. "Two-Sided Platforms: Pricing and Social Efficiency," Discussion papers 04035, Research Institute of Economy, Trade and Industry (RIETI).
    4. Kevin Boudreau, 2010. "Open Platform Strategies and Innovation: Granting Access vs. Devolving Control," Management Science, INFORMS, vol. 56(10), pages 1849-1872, October.
    5. Peters, Frank, 2018. "The business of video games is a multi-player game : Essays on governance choices and performance in a two-sided market in the cultural industries," Other publications TiSEM 886b3148-4bbb-4ea4-b666-0, Tilburg University, School of Economics and Management.
    6. Dietl Helmut & Duschl Tobias & Franck Egon & Lang Markus, 2012. "A Contest Model of a Professional Sports League with Two-Sided Markets," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(3), pages 336-359, June.
    7. Paul Belleflamme & Eric Toulemonde, 2009. "Negative Intra-Group Externalities In Two-Sided Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 245-272, February.
    8. Viecens, María Fernanda, 2006. "Two-sided platforms with endogenous quality differentiation," UC3M Working papers. Economics we061204, Universidad Carlos III de Madrid. Departamento de Economía.
    9. Kim, Dohoon, 2016. "Value ecosystem models for social media services," Technological Forecasting and Social Change, Elsevier, vol. 107(C), pages 13-27.
    10. Kalm, Matias & Seppälä, Timo & Ali-Yrkkö, Jyrki, 2014. "Extracting Value through Technology and Service Platforms: The Case of Licensing, Services and Royalties," ETLA Brief 21, The Research Institute of the Finnish Economy.
    11. Stefan Behringer, 2014. "Network Effects, Spillovers and Market Structure," Manchester School, University of Manchester, vol. 82(2), pages 143-159, March.
    12. Boudreau, Kevin, 2006. "The Boundaries of the Platform: Vertical Integration and Economic Incentives in Mobile Computing," Working papers 30609, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    13. Attila Ambrus & Rossella Argenziano, 2009. "Asymmetric Networks in Two-Sided Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 1(1), pages 17-52, February.
    14. Andras Niedermayer, 2005. "Does a Platform Owning Monopolist Want Competition?," Diskussionsschriften dp0517, Universitaet Bern, Departement Volkswirtschaft.

    More about this item

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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