Multidimensional Platform Design

5 Pages Posted: 4 Jan 2017 Last revised: 1 Feb 2017

Andre Veiga

University of Oxford - Nuffield College

E. Glen Weyl

Microsoft Research; Yale University

Alexander White

Tsinghua University - School of Economics & Management

Date Written: January 4, 2017

Abstract

Successful platforms attract not just many users, but also those of the right kind. "The right kind of user" is one who can either be directly monetized or who differentially attracts other valuable users. Bonacich centrality on the network of user sorting with direct value of monetization captures this feedback loop and thus characterizes the value of user characteristics. We use this value to determine optimal steady-state platform design and reliable means for platforms to reach such a steady state. We apply these results respectively to explain the dynamic growth strategy of social networks and urban development policies of cities.

Appendix available at: http://ssrn.com/abstract=2891805.

Keywords: Platforms, Multidimensional Heterogeneity, Quality, Design, Sorting, Centrality

JEL Classification: D42, D85, L86, R58

Suggested Citation

Veiga, Andre and Weyl, E. Glen and White, Alexander, Multidimensional Platform Design (January 4, 2017). American Economic Review, Vol. 107, No. 5, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2891806

Andre Veiga

University of Oxford - Nuffield College ( email )

New Road
Oxford, OX1 1NF
United Kingdom

HOME PAGE: http://www.andreveiga.com

Eric Glen Weyl (Contact Author)

Microsoft Research ( email )

641 Avenue of the Americas
7th Floor
New York, NY 10011
United States
(857) 998-4513 (Phone)

HOME PAGE: http://www.glenweyl.com

Yale University ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Alexander White

Tsinghua University - School of Economics & Management ( email )

Mailbox A-44
Weilun Building
Beijing, 100084
China

HOME PAGE: http://alex-white.net

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