From Free Access to Winner-Takes-All - A Reactive Sequence Perspective on Digital Platform Capitalism

Jürgen Beyer

No zaq7w_v2, SocArXiv from Center for Open Science

Abstract: This paper reinterprets the emergence of the digital winner-takes-all economy through Mahoney’s concept of the reactive sequence. Rather than treating digital concentration as the natural result of network effects, scale economies, or technological lock-in, it argues that these mechanisms became decisive only within a historically specific institutional trajectory. The early internet was constituted as a non-commercial sphere shaped by gift exchange, hacker ethics, open sharing, and community-oriented practices. As these norms diffused into mass usage, they were simplified into low willingness to pay and expectations of free access. Digital firms reacted by monetizing other market sides, especially advertisers, sellers, and platform-dependent businesses. This adaptation intensified network effects, weakened price differentiation, and privileged market leaders. Over time, observed concentration became generalized into a winner-takes-all expectation and institutionalized through venture-capital strategies, rapid scaling norms, and founder self-understandings. The essay extends this sequence to contemporary AI firms and their emerging wealth elites.

Date: 2026-06-06
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:zaq7w_v2

DOI: 10.31219/osf.io/zaq7w_v2

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