플랫폼 경쟁과 멀티호밍 제한: 교차 네트워크 효과의 비대칭성과 구매자 유형의 불완비정보

We consider a dominant platform provider operating both legacy and new platforms that connects users with suppliers in a two-sided market context. In addition to the typical indirect network effects in the two-sided market, backward compatibility works on the new platform. Thus, users joining the new one can also enjoy the services provided by suppliers using the legacy platform. Users and suppliers are linearly differentiated between two platforms as in the Hotelling model and play a subscription game of choosing one platform at the lower level. The suppliers in the new platform may suffer from congestion, which can be alleviated by platform provider’s investment on the new one. The platform provider also determines price margins for the supplier sides. Our equilibrium (eq.) analysis in the subscription game identifies an interior eq. (coexistence of both platforms in both sides). Though the backward compatibility plays a stabilizing role for the interior eq., its stability is fragile due to the network effects. Rather, some boundary eq.’s, where at least one side tips to the legacy or the new platform, are more likely to be stable. The backward compatibility is a key factor that characterizes the stable boundary eq.’s. The upper stage game is led by the platform provider, which tries to maneuver the system toward one of the stable boundary eq.’s using price margins and investment. The platform provider prefers an all-new boundary eq. when the indirect network effect and the maximum price margin for the new platform are large; thus, it puts a significant investment in the new one. With a small indirect network effect for suppliers, however, the platform provider does not invest in the new platform and choose a separate boundary eq. where two sides split into different platforms. Whether the user side completely tips to the new one (completely separated eq.) or not (partially separated eq.) depends on the backward compatibility. The relative advantage of the all-new eq. over the separate eq.’s in terms of social welfare from both sides depends on the backward compatibility as well as the indirect network effects for the new platform.

The market for plug-in electric vehicles (EVs) exhibits indirect network effects due to the interdependence between EV adoption and charging station investment. Through a stylized model, we demonstrate that indirect network effects on both sides of the market lead to feedback loops that could alter the diffusion process of the new technology. Based on quarterly EV sales and charging station deployment in 353 metro areas from 2011 to 2013, our empirical analysis finds indirect network effects on both sides of the market, with those on the EV demand side being stronger. The federal income tax credit of up to $7,500 for EV buyers contributed to about 40% of EV sales during 2011–13, with feedback loops explaining 40% of that increase. A policy of equal-sized spending but subsidizing charging station deployment could have been more than twice as effective in promoting EV adoption.

Dynamics of Technology Adoption and Critical Mass: The Case of U.S. Electric Vehicle Market

Software exclusivity and the scope of indirect network effects in the U.S. home video game market

Gorka presents the theory of two-sided markets that create value (indirect network effect) by connecting two distinct groups of agents, e.g. card payers and card payees. This chapter characterises conditions defining two-sided markets and market failures which can arise there. It also deals with economics of interchange fees. Gorka explains the modus operandi of four- and three-party card schemes, their business model, inherent fees, and how they are set. He illuminates the role of interchange fees according to Baxter’s model and its later refinements. This chapter includes discussion of the optimal level of interchange fees maximising the joint welfare of consumers and merchants (see the “tourist test” of Rochet and Tirole). Gorka develops the conceptual framework for assessing the impact of interchange fee regulation.

Platforms, or two-sided markets, have become a topic of significant discussion in competition law over the past decade, culminating in the recent US Supreme Court decision in Ohio v. American Express Co. This note discusses externalities in platforms. Indirect network effects, one type of externality common on platforms, have been prominent in these discussions. However, the prominence of indirect network effects has obscured the importance of another externality that exists on platforms, a usage externality. This note argues that a near exclusive focus on indirect network effects has led to errors in identifying when a market should be analyzed as a platform. These errors implicate the identification of platforms like those at issue in Ohio v. American Express Co. as well as a wider set of platforms, such as ad-supported media platforms.

The work presented here is part of a wider research programme oriented around three specific questions. First, how do individual agents appropriate returns from innovation and how is this affected by the availability (or not) of intellectual property rights such as copyrights and patents? Second, how does this translate into the aggregate production of knowledge, once one takes account of the interaction between producers and the cumulative nature of the process of knowledge production? Finally, How can we incorporate this into an estimate of the welfare trade-off inherent in intellectual property rights (the basic prerequisite for formulating rational IP policy)? The dissertation contains theoretical work on each of these questions together with a brief introductory preamble and a review of the existing literature on the economics of knowledge.

Review for "Trophic rewilding benefits a tropical community through direct and indirect network effects"

The Double-Edged Sword of Backward Compatibility: The Adoption of Multi-Generational Platforms in the Presence of Intergenerational Services

Going beyond the traditional conceptualization of indirect network effects as the number of complements available, this study analyzes how the network positions of platforms and complementors explain platform dominance. We use data from the U.S. home video game industry between 2002 and 2006 to test our model of platform dominance. While the impact of degree of links with complementors representing the number of complements is significant, our study also finds that platform dominance is positively influenced by support from a greater breadth of titles by complementors and lesser degree of overlap with other platforms. We also find that ties with high-status complementors influence platform dominance, but this impact decreases with platform age. Our results suggest benefits to refine our conceptualization of indirect network effects from a network perspective. The managerial implications are that each platform provider needs to differentiate its platform by attracting high-status developers and by providing third-party developers with toolkits that encourage them to develop exclusive titles.

Platform Competition in Online Digital Market

The present work is devoted to the description of the evolution of antimonopoly cases brought against Microsoft by the American, European and Russian antimonopoly authorities. The focus of this work is on assessing the ability of Microsoft as a manufacturer of an operating system that occupies a dominant position that can influence competition in the application software market, including the browser market, antivirus protection and media players. The position in the market of operating systems is closely related to the presence of direct and indirect network effects. It was found that in most cases Microsoft was accused of obtaining vertical restrictions and related sales in order to restrict competition. In addition, in later antitrust cases against Microsoft, there has been an increasing focus on behavioral aspects.

Tech giants such as Google and Facebook generate significant amounts of advertising income, which is mainly reported in low-tax countries. This has started a policy discussion about how to re-align the locations of value creation and taxation. The success of the business model of these digital platforms relies on the existence of indirect network effects, which are the prime reason why these platforms exist and generate advertising income. To account for these effects, conventional tax policy needs to be adjusted. This includes an adjusted concept of nexus, which should rely on the location of users because they generate the relevant indirect network effects. The recent European Union (EU) proposal of a digital service tax goes in this direction and constitutes a policy option for the Netherlands.

Make Way for the Penguin? Explaining Commitment to Linux by Independent Software Companies

Can indirect network effects lead to adoption externalities? If so, when? We show that in markets where consumption benefits arise from hardware/software systems, adoption externalities will occur when there are (i) increasing returns to scale in the production of software, (ii) free entry in software, and (iii) consumers have a preference for software variety. The private benefit of the marginal hardware purchaser is less than the social benefit since the marginal hardware purchaser does not internalize the welfare improving response of the software industry, particularly the increase in software variety, on inframarginal purchasers when the market for hardware expands.