The Economics of Platforms

Digital platforms have become the superstars in our economies. How do they work? This book on the economics of platforms incorporates important insights from economics over the last 20 years. It spells out rigorous and yet simple models on how platforms choose their strategies and uses real-world business cases as illustrations.

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Digital platforms controlled by Alibaba, Alphabet, Amazon, Facebook, Netflix, Tencent and Uber have transformed not only the ways we do business, but also the very nature of people's everyday lives. It is of vital importance that we understand the economic principles governing how these platforms operate. This book explains the driving forces behind any platform business with a focus on network effects. The authors use short case studies and real-world applications to explain key concepts such as how platforms manage network effects and which price and non-price strategies they choose. This self-contained text is the first to offer a systematic and formalized account of what platforms are and how they operate, concisely incorporating path-breaking insights in economics over the last twenty years.