Digital platforms, multi-sided markets, and the anticommon problem

Matteo Alvisi

Chapter 7 in SMEs in the Digital Era, 2023, pp 139-156 from Edward Elgar Publishing

Abstract: In this article we analyze some of the most relevant contributions of the economic literature on competition among platforms and among firms selling their products within or across platforms. We focus on the impact that such new business models produce on prices, firm profits, and welfare, with particular attention paid to small and medium enterprises. In the new Internet of Things, platforms compose ‘multi-sided ecosystems’ where they can either be substitutes - competing to attract the most successful independent complementors - or complementary to one another ‘by necessity’ because of technical or legal reasons. We study both cases ‘transversally’ and concentrate on the role of complementarity in shaping price and quantity competition in imperfectly competitive markets. Thus, we will be able to verify whether the standard results on the so-called ‘tragedy of the anticommons’, which dates to Cournot (1838), can be extended to multi-sided markets.

Keywords: Business and Management; Economics and Finance; Innovations and Technology; Law - Academic (search for similar items in EconPapers)
Date: 2023
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