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Efficiency and the Provision of Open Platforms


  • Tåg, Joacim

    () (Research Institute of Industrial Economics (IFN))


Private firms may not have efficient incentives to allow third-party producers to access their platform or develop extensions for their products. Based on a two-sided market model, I discuss two reasons for why. First, a private firm may not be able to internalize all benefits from cross-group externalities arising with third-party extensions. Second, firms may have strategic incentives to shut out third-parties because it relaxes competition.

Suggested Citation

  • Tåg, Joacim, 2008. "Efficiency and the Provision of Open Platforms," Working Paper Series 748, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:0748

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    Cited by:

    1. Dietl, Helmut & Lang, Markus & Lin, Panlang, 2013. "Advertising pricing models in media markets: Lump-sum versus per-consumer charges," Information Economics and Policy, Elsevier, vol. 25(4), pages 257-271.

    More about this item


    Platforms; Two-sided Markets; Open versus Closed;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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