Efficiency and the Provision of Open Platforms

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.

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Year of publication:	2008
Authors:	Tåg, Joacim
Publisher:	Stockholm : Research Institute of Industrial Economics (IFN)
Subject:	Software \| Marktstruktur \| Internetbasierter Dienst \| Theorie \| Platforms \| Two-sided Markets \| Open versus Closed

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Series:	IFN Working Paper ; 748
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	565280481 [GVK] hdl:10419/81510 [Handle] RePEc:hhs:iuiwop:0748 [RePEc]
Classification:	D40 - Market Structure and Pricing. General ; L10 - Market Structure, Firm Strategy, and Market Performance. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010320391