tgw_slides_wk10_lecture_redacted.pptx - Copyright 2019 NETWORK EFFECTS and MULTI-SIDED PLATFORMS(Part II WEEK 9-10 Note on final exam \u2022 Three hours

tgw_slides_wk10_lecture_redacted.pptx - Copyright 2019...

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NETWORK EFFECTS and MULTI-SIDED PLATFORMS (Part II) WEEK 9-10 Copyright 2019
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2 Note on final exam Three hours Comparison to midterm Identical layout More questions, more material Less rushed, in general Clearly cumulative Laptop recommended but not necessary “Closed book”—just bring a clean copy of case Case, i.e. set of articles, posted (food order/delivery platforms or online marketplaces, depending on when you are taking it)
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3 Week 9 Recap
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4 Week 10 Agenda Characterize platform outcomes, e.g. did a winner take all? Linkedin vs Google+ Xbox v playstation All tipped “Is the market going to tip?” Predict platform structure in equilibrium | market attributes Billion dollar question: “Can we tip it towards our platform?” Characterize optimal strategies | expected platform structure
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Platform structure and competition
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6 Market structure vs. platform structure Market structure determined by # and offerings of firms Network effects complicate the issue Key question is who interacts with whom and with how many Platform structure determined by both sides’ interactions
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7
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8 Platform structures Network Side 1 Users Side 1 Structure Side 2 Structure Side 2 Users Video cassette players HH WTA Movie Studios Video games Consumers Mono Mult Game Developers Credit cards Consumers Mult Mixed Merchants Short-term lodging rentals Renters Mixed Host Shopping mall Consumers Mixed Mult Stores Digital documents Readers WTA Writers
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Determinants of platform structure
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10 Platform structure determinants Four environmental factors determine platform structure Mostly beyond our control Clearly impact incentives Critical to consider when making strategic decisions
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11 #1 Scale economies
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