Platforms and Network Effects

Forthcoming, Handbook of Game Theory and Industrial Organization, edited by Luis Corchon and Marco Marini, Edward Elgar.

38 Pages Posted: 10 Jan 2017  

Paul Belleflamme

CORE and Louvain School of Management, UCL (Université Catholique de Louvain); CESifo (Center for Economic Studies and Ifo Institute)

Martin Peitz

University of Mannheim - Department of Economics

Date Written: September 2016

Abstract

In many markets, user benefits depend on participation and usage decisions of other users giving rise to network effects. Intermediaries manage these network effects and thus act as platforms that bring users together. This paper reviews key findings from the literature on network effects and two-sided platforms. It lays out the basic models of monopoly platforms and platform competition, and elaborates on some routes taken by recent research.

Keywords: network effects, digital platforms, two-sided markets, tipping, platform competition

JEL Classification: D43, L13, L86

Suggested Citation

Belleflamme, Paul and Peitz, Martin, Platforms and Network Effects (September 2016). Forthcoming, Handbook of Game Theory and Industrial Organization, edited by Luis Corchon and Marco Marini, Edward Elgar. . Available at SSRN: https://ssrn.com/abstract=2894906

Paul Belleflamme

CORE and Louvain School of Management, UCL (Université Catholique de Louvain) ( email )

34 Voie du Roman Pays
POBox L1.03.01
B-1348 Louvain-la-Neuve, B-1348
Belgium
+32 10 47 82 91 (Phone)
+32 10 47 43 01 (Fax)

HOME PAGE: http://perso.uclouvain.be/paul.belleflamme/Site/Home.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Martin Peitz (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany
+49 621 181-1835 (Phone)

HOME PAGE: http://peitz.vwl.uni-mannheim.de/

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