Efficiency and the Provision of Open Platforms

Joacim Tåg

No 748, Working Paper Series from Research Institute of Industrial Economics

Abstract: 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.

Keywords: Platforms; Two-sided Markets; Open versus Closed (search for similar items in EconPapers)
JEL-codes: D40 L10 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2008-04-28
New Economics Papers: this item is included in nep-com, nep-ict, nep-mic and nep-net
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Published as Tåg, Joacim, 'Competing Platforms and Third Party Application Developers' in Communication & Strategies, 2009, pages 95-114.

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https://www.ifn.se/wfiles/wp/wp748.pdf (application/pdf)

Related works:
Journal Article: Competing Platforms and Third Party Application Developers (2009)
Working Paper: Open Versus Closed Platforms (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0748

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