IDEAS home Printed from https://ideas.repec.org/p/men/wpaper/80_2022.html
   My bibliography  Save this paper

A Review of Platform Business Models

Author

Listed:
  • Marketa Mlcuchova

    (Department of Finance, Faculty of Business and Economics, Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic)

Abstract

The paper focuses on platform business models as ubiquitous features of the digital economy whose economic importance is continuously increasing. Considering their varying definitions and diverse typology, this review of platform business models aims to discuss and evaluate the current heterogeneous literature. In line with fulfilling the aim of the paper, the following research question is addressed: ‘What are the main attributes of platform business models?’ Based on a vast literature review, the paper coins a unified definition and devises a novel typology, distinguishing four main types of platform business models: transaction, innovation, integrated and investment. Furthermore, the importance of both digital data and network effects as the main identified attributes is highlighted. Additionally, the paper devises a novel typology of network effects, amplifying users’ value-creating activities and interconnected relationships. The novel typology of network effects is distinguishing direct, indirect (cross-sided, cross-network or two-sided), data, positive and negative network effects.

Suggested Citation

  • Marketa Mlcuchova, 2022. "A Review of Platform Business Models," MENDELU Working Papers in Business and Economics 2022-80, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:80_2022
    as

    Download full text from publisher

    File URL: http://ftp.mendelu.cz/RePEc/men/wpaper/80_2022.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Junhong Chu & Puneet Manchanda, 2016. "Quantifying Cross and Direct Network Effects in Online Consumer-to-Consumer Platforms," Marketing Science, INFORMS, vol. 35(6), pages 870-893, November.
    2. Farrell, Joseph & Saloner, Garth, 1986. "Installed Base and Compatibility: Innovation, Product Preannouncements, and Predation," American Economic Review, American Economic Association, vol. 76(5), pages 940-955, December.
    3. Carl Dahlman & Sam Mealy & Martin Wermelinger, 2016. "Harnessing the digital economy for developing countries," OECD Development Centre Working Papers 334, OECD Publishing.
    4. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    5. Venkatesh Shankar & Barry L. Bayus, 2003. "Network effects and competition: an empirical analysis of the home video game industry," Strategic Management Journal, Wiley Blackwell, vol. 24(4), pages 375-384, April.
    6. Hiroshi Ohashi, 2003. "The Role of Network Effects in the US VCR Market, 1978–1986," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(4), pages 447-494, December.
    7. K. Sabeel Rahman & Kathleen Thelen, 2019. "The Rise of the Platform Business Model and the Transformation of Twenty-First-Century Capitalism," Politics & Society, , vol. 47(2), pages 177-204, June.
    8. Sangin Park, 2004. "Quantitative Analysis of Network Externalities in Competing Technologies: The VCR Case," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 937-945, November.
    9. Olbert, Marcel & Spengel, Christoph, 2019. "Taxation in the digital economy: Recent policy developments and the question of value creation," ZEW Discussion Papers 19-010, ZEW - Leibniz Centre for European Economic Research.
    10. Elding, Catherine & Morris, Richard, 2018. "Digitalisation and its impact on the economy: insights from a survey of large companies," Economic Bulletin Boxes, European Central Bank, vol. 7.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, September.
    2. Binken, J.L.G. & Stremersch, S., 2008. "The Effect of Superstar Software on Hardware Sales in System Markets," ERIM Report Series Research in Management ERS-2008-025-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    3. Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
    4. Kretschmer, Tobias & Muehlfeld, Katrin, 2006. "Co-opetition and prelaunch in standard-setting for developing technologies," LSE Research Online Documents on Economics 19843, London School of Economics and Political Science, LSE Library.
    5. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
    6. Scott K. Shriver, 2010. "Network Effects in Alternative Fuel Adoption: Empirical Analysis of the Market for Ethanol," Working Papers 10-20, NET Institute.
    7. Netsanet Haile & Jorn Altmann, 2015. "Value Creation in Software Service Platforms," TEMEP Discussion Papers 2015123, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Sep 2015.
    8. Jean-Pierre H. Dubé & Günter J. Hitsch & Pradeep K. Chintagunta, 2010. "Tipping and Concentration in Markets with Indirect Network Effects," Marketing Science, INFORMS, vol. 29(2), pages 216-249, 03-04.
    9. Gretz, Richard T. & Basuroy, Suman, 2013. "Why Quality May Not Always Win: The Impact of Product Generation Life Cycles on Quality and Network Effects in High-tech Markets," Journal of Retailing, Elsevier, vol. 89(3), pages 281-300.
    10. Dietrich, Antje-Mareike, 2016. "Governmental platform intermediation to promote alternative fuel vehicles," Economics Department Working Paper Series 16, Technische Universität Braunschweig, Economics Department.
    11. Qi Wang & Huazhong Zhao & Jinhong Xie, 2016. "Intra-Standard Competition: The Joint Impact of an Installed-User Base and a Supporting-Firm Base in Markets with Network Effects," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 3(3), pages 159-174, December.
    12. Richards, Timothy J. & Hamilton, Stephen F., 2018. "Food waste in the sharing economy," Food Policy, Elsevier, vol. 75(C), pages 109-123.
    13. Corts, Kenneth S. & Lederman, Mara, 2009. "Software exclusivity and the scope of indirect network effects in the U.S. home video game market," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 121-136, March.
    14. Pinar Karaca-Mandic, 2011. "Role of complementarities in technology adoption: The case of DVD players," Quantitative Marketing and Economics (QME), Springer, vol. 9(2), pages 179-210, June.
    15. Heli Koski & Tobias Kretschmer, 2004. "Survey on Competing in Network Industries: Firm Strategies, Market Outcomes, and Policy Implications," Journal of Industry, Competition and Trade, Springer, vol. 4(1), pages 5-31, March.
    16. Marc Rysman & Gautam Gowrisankaran & Minsoo Park, 2011. "Measuring Network Effects in a Dynamic Environment," Boston University - Department of Economics - Working Papers Series WP2011-061, Boston University - Department of Economics.
    17. Dietrich, Antje-Mareike, 2017. "Platform intermediation to sponsor alternative fuel vehicles," Transport Policy, Elsevier, vol. 54(C), pages 90-99.
    18. Stremersch, S. & Tellis, G.J. & Franses, Ph.H.B.F. & Binken, J.L.G., 2007. "Indirect Network Effects in New Product Growth," ERIM Report Series Research in Management ERS-2007-019-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    19. Christian Stummer & Dennis Kundisch & Reinhold Decker, 2018. "Platform Launch Strategies," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 60(2), pages 167-173, April.
    20. Zhiyi Wang & Lusi Yang & Jungpil Hahn, 2023. "Winner Takes All? The Blockbuster Effect on Crowdfunding Platforms," Information Systems Research, INFORMS, vol. 34(3), pages 935-960, September.

    More about this item

    Keywords

    Digital economy; business model; platform business model; digital data; network effects;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:men:wpaper:80_2022. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Luděk Kouba (email available below). General contact details of provider: https://edirc.repec.org/data/femencz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.