Platform Rules: Multi-Sided Platforms as Regulators

29 Pages Posted: 18 Sep 2008  

Kevin Boudreau

Northeastern University - Innovation & Entrepreneurship; Dept. of Economics; College of Computer & Information Sciences; National Bureau of Economic Research (NBER)

Andrei Hagiu

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: September 18, 2008

Abstract

This paper provides a basic conceptual framework for interpreting non-price instruments used by multi-sided platforms (MSPs) by analogizing MSPs as "private regulators" who regulate access to and interactions around the platform. We present evidence on Facebook, TopCoder, Roppongi Hills and Harvard Business School to document the "regulatory" role played by MSPs. We find MSPs use nuanced combinations of legal, technological, informational and other instruments (including price-setting) to implement desired outcomes. Non-price instruments were very much at the core of MSP strategies.

Keywords: Platforms, regulation, network effects, distributed innovation

JEL Classification: K2, L1, L2, L4, O3

Suggested Citation

Boudreau, Kevin and Hagiu, Andrei, Platform Rules: Multi-Sided Platforms as Regulators (September 18, 2008). Available at SSRN: https://ssrn.com/abstract=1269966 or http://dx.doi.org/10.2139/ssrn.1269966

Kevin Boudreau (Contact Author)

Northeastern University - Innovation & Entrepreneurship; Dept. of Economics; College of Computer & Information Sciences ( email )

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Andrei Hagiu

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-313
Cambridge, MA 02142
United States
617-715-4844 (Phone)

HOME PAGE: http://andreihagiu.com/

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