multi-sided market

Matchmakers: The New Economics of Multisided Platforms

by David S. Evans and Richard Schmalensee  · 23 May 2016  · 383pp  · 81,118 words

the world / David S. Evans and Richard Schmalensee. Description: Boston, Massachusetts : Harvard Business Review Press, [2016] Identifiers: LCCN 2015046357 | ISBN 9781633691728 (alk. paper) Subjects: LCSH: Multi-sided platform businesses. Classification: LCC HD9999.M782 E93 2016 | DDC 338.7–dc23 LC record available at http://lccn.loc.gov/2015046357 ISBN: 9781633691728 eISBN: 9781633691735 To

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into key concepts that matchmakers must deal with in building, igniting, and operating their businesses. Finally, part III (chapters 11–13) describes how turbocharged, multisided platforms are creating new industries, destroying old ones, and forcing existing businesses to reinvent themselves to survive. A glossary at the back of the book provides

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definitions for the key concepts surrounding multisided platforms. To understand the perils and promise of multisided platforms we begin by describing the arduous journey, and near-death experiences, of a matchmaker we often use. Part One Economics

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entrepreneurs—and many otherwise highly successful businesses—have tried this “simple” strategy and failed. Everything they and their investors put into their multisided platform ventures went up in smoke. A multisided platform is one of the toughest business models to get right. The entrepreneur has to solve a tough puzzle and use counterintuitive strategies

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model, they wrote a paper, “Platform Competition in Two-Sided Markets,” which began circulating among economists in 2000.18 Economists now call these businesses multisided platforms because some of them actually facilitate interactions between more than two types of customers, as we will soon see. Jean Tirole received the Nobel Memorial

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paying some customers rather than charging them anything can be profitable in theory and often is in practice. The differences between single-sided businesses and multisided platforms are stark. Ordinary businesses buy inputs of various sorts from suppliers, sometimes transform them into finished products, and sell goods or services to customers.

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is two-sided because it brings diners and restaurants together to interact directly. It takes no part in transactions between them. Matchmakers are called multisided platforms because they usually operate a physical or virtual place that helps the different types of customers get together. Nightclubs have physical places where men and

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increasing the amount of foot traffic that passes by the retail stores against annoying shoppers by making them walk more. Computer operating systems are often multisided platforms. They have the same economic code as shopping malls and a different code than automobile manufacturers. Microsoft Windows is an intermediary between app developers

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The Internet and smartphones have turbocharged the ancient matchmaker business model. Whether turbocharged or not, the same economic principles for building, starting, and operating a multisided platform apply. Before you can understand the new economics that makes these matchmakers tick, you have to clear your heads of the old concepts about traditional

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way they built their businesses, designed their products, ran their operations, and priced their offerings were heavily influenced by these network effects. These businesses operated multisided platforms. Economists, including ourselves, then started studying how these firms and industries worked in fact. It soon became apparent that much of the received wisdom about

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depends, in an even more complicated way, on the amount of advertising. This interdependency of demands results from indirect network effects. It is what distinguishes multisided platforms from single-sided firms. Traditional economics, including what is still taught in most economic textbooks and in most MBA courses, completely ignores indirect network effects

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women for admittance and drinks, and online matchmakers generally charge men and women the same. TABLE 2-1 Money and subsidy sides for common multisided platform industries Multisided platform Money side Subsidy side Typical price on subsidy side Video game consoles Game publishers pay royalties. Consumers pay marginal cost or less for console.

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pay. Free Nightclubs Men pay. Women sometimes get in for free or get below-cost drinks. Below cost or free Building, Igniting, and Designing a Multisided Platform Multisided platforms often must perform the business equivalent of walking a tightrope while juggling. These platforms are selling connections. They must balance their treatment of all customer

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provide a deeper understanding of the concepts that we’ve presented in this chapter. We focus on six critical issues that multisided platforms must address. The opportunity for a multisided platform ordinarily arises when frictions keep market participants from dealing with each other easily and directly. Entrepreneurs can identify opportunities for starting a

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, the problems facing a new online or offline magazine are relatively well understood though rarely simple. It is important to note, however, that comfortable multisided platforms in mature industries can find themselves in uncharted waters when new competitive matchmakers appear, as print newspapers have learned to their sorrow. Before we turn

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to these issues, we need to explain why multisided platforms have suddenly become much more prominent in the global economy, with preteens emerging as corporate giants and infants securing massive market values. Chapter 3 Turbocharging

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both of them were about fifty-five hundred miles from Uber’s San Francisco headquarters. Those technologies have also resulted in the creation of foundational multisided platforms on which other matchmakers can build. These “platforms-for-platforms” include fixed and mobile Internet service providers, which connect users and content providers, and

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for fixed and mobile devices, and storage and computation is moving to the Cloud. These six technologies have enabled the development of two foundational multisided platforms that support other multisided platforms: Internet service providers and operating systems. Two-Sided Platforms for People and Content Providers The companies that link users to the Internet and

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we discussed earlier. It generally involves millions of lines of instructions—what’s known as code—in that language.23 Some computer operating systems are multisided platforms. The Windows and Mac OS operating systems provided a standard environment connecting personal computer users and app developers. Application developers rely on these operating

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it was available in November 2015, had downloaded the Uber app onto their smartphones.25 Mobile operating systems, particularly iOS and Android, are foundational multisided platforms that power other important platforms. They are critical components of ride-hailing apps such as Uber and its Chinese competitor Didi Kuaidi and important for

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. These smart mobile devices, with their invisible engines, connected by mobile broadband and fixed wireless networks to the Cloud, provide a foundation for new multisided platforms to solve more frictions, reduce more transaction costs, and make more mutually valuable connections in ways we can’t yet envision. Creative Destruction Each of

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jobs, and restaurants bought fewer pencils and notebooks, but OpenTable didn’t destroy businesses. Looking over the last decade, however, it is clear that turbocharged multisided platforms have developed better ways of doing things that are devastating traditional businesses. Pioneering turbocharged matchmakers have even displaced traditional matchmakers. Ad-supported web-based businesses

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detail at how matchmakers deal with frictions, ignition, pricing, ecosystems, design, and governance. Part Two Building, Igniting, and Operating Matchmakers Chapter 4 Friction Fighters How Multisided Platforms Create Value by Finding and Reducing Transaction Costs It is 1998. Zhang Wei operates a small manufacturing plant in Foshan, about twenty miles outside of

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A’s can use with the platform. The platform operator supplies some of these complementary products, just as Microsoft does with Office. Some vertically integrated multisided platforms, like Microsoft, operate significant businesses in competition with other participants on the platform. FIGURE 7-1 A vertically integrated platform The platform facilitates interactions between

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that participants do not impose negative externalities by, for example, failing to fulfill their obligations or using opportunistic and nefarious methods for manipulating prices.20 Multisided platforms adopt rules and regulations even when platform participants could turn to the courts. Some of them adopt very extensive rules to do so. BlaBlaCar,

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on simple, refined, creative, well-thought through interfaces.” Policing platforms, particularly sprawling global ones with millions of users, can require much effort. Internet-based multisided platforms have developed tools to help participants penalize members from engaging in bad behavior. The five-star rating system is common now and seems to be

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18. The economic development of Africa, long an impoverished and stagnant continent, is a complicated story and involves much more than mobile money. But these multisided platforms, building atop the spread of feature phones and cell networks, have proved extremely important in providing financial services in the countries where they have ignited

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platforms. The second wave of disruption came from the expansion of mobile broadband providers and the spread of smartphones with sophisticated operating systems. These multisided platforms made it possible for people to access web-based companies almost anywhere and almost anytime. They also provided foundational platforms for apps that made it

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ones, to operate profitable card programs. For traditional retail, there isn’t a simple guide for survival in the face of the emergence of turbocharged multisided platforms. The possible responses vary across the diverse categories of retailers, from jewelry to electronics to groceries; retailer sizes from small stores to large department

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improve on things that other matchmakers have done for many years. 3. What is pioneering is that modern information and communications technologies have turbocharged the multisided platform business model. 4. The history of matchmakers suggests that today’s sharing-economy matchmakers won’t be the last to make waves. 5. Turbocharged

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effect or from a behavioral externality. See the examples for behavioral externality, direct network effects, and indirect network effects. Foundational platform: A multisided platform that provides core services to other multisided platforms and is therefore a “platform for platforms.” These include Internet Service Providers (ISPs), which connect edge providers and end users. For example

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pay little if anything and are provided content of significant value. Transaction cost: The economists’ term for frictions; see “Friction.” Turbocharged matchmaker: A matchmaker, or multisided platform, that benefits from a significant combination of powerful computer chips, the Internet, the web, broadband communications, programming languages and operating systems, and the Cloud. Airbnb

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Evans, Andrei Hagiu, and Richard Schmalensee, Invisible Engines: How Software Platforms Drive Innovation and Create Value [Cambridge, MA: MIT Press, 2006]). To call Windows a multisided platform business, on the other hand, is to emphasize its business role in facilitating interactions between app developers and end users. This book focuses exclusively on

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and Above,” https://www.cbinsights.com/research-unicorn-companies. The following ten companies were the largest in order of valuation; companies in [brackets] are not multisided platforms. Uber, [Xiaomi], Airbnb, [Palantir Technologies], Snapchat, Flipkart, Didi Kuaidi, [SpaceX], Pinterest, and Dropbox. 6. The company was initially called easyeats.com but changed its

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an attribute of individual businesses, not necessarily of all businesses in a market. A nontechnical discussion of this paper and other early economic papers on multisided platforms is given by Richard Schmalensee, “An Instant Classic: Rochet & Tirole, Platform Competition in Two-Sided Markets,” Competition Policy International 10, no. 2 (2014). 19.

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, by subsidies if necessary, that enough of the other group will be attracted to join without the need for subsidies. See Bruno Jullien, “Competition in Multi-Sided Markets: Divide-and-Conquer,” American Economic Journal: Microeconomics 3, no. 4 (2011). 19. Chuck Templeton (founder of OpenTable), in discussion with the authors, September 19,

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Right Now,” Business 2 Community, May 14, 2014, http://www.business2community.com/pinterest/official-pinterest-going-begin-selling-ads-right-now-0883458. 21. Andrei Hagiu, “Multi-Sided Platforms: Foundations and Strategy,” No. 714-436 (Boston: Harvard Business School, 2013), http://www.hbs.edu/faculty/Pages/item.aspx?num=44940. 22. Eric M.

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exclusionary vibe that attracts the right people and discourages the wrong people. For further discussion, see David S. Evans, “Governing Bad Behavior by Users of Multi-Sided Platforms,” Berkeley Technology Law Journal 27, no. 2 (2012), http://scholarship.law.berkeley.edu/btlj/vol27/iss2/7/. 10. David S. Evans, “Governing Bad Behavior

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by Users of Multi-Sided Platforms,” Berkeley Technology Law Journal 2, no. 27 (2012), http://scholarshiplaw.berkeley.edu/btlj/vol27/iss2/7/. 11. Platforms can also create thicker markets by directly

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and Customs of the London Stock Exchange (1879; repr. Charleston, SC: Nabu Press, 2010), 1. 20. David S. Evans, “Governing Bad Behavior by Users of Multi-Sided Platforms,” Berkeley Technology Law Journal 27, no. 2 (2012), http://scholarship.law.berkeley.edu/btlj/vol27/iss2/7/. 21. BlaBlaCar, “Terms and Conditions,” https://www.blablacar

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, 80–81 Mantech International, 59 margins, 30–35. See also pricing market makers, 123 marquee customers, 80 marquee participants, 125 MasterCard, 157, 190 matchmakers. See multisided platforms Ma Yun (Jack Ma), 58–61 McCarthy, Barry, 191 McNamara, Frank, 13 Meier, Megan, 138, 140 Mercedes-Benz, 31 Michie, Ranald, 141–142 microchips,

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helps lead, two consulting organizations: Global Economics Group, which provides economic expertise on antitrust and regulatory matters, and Market Platform Dynamics, which advises companies on multisided platform strategies. He is also Chairman of PYMNTS.com, a multisided media and data analytics platform he cofounded. He has consulted for many of the largest

The Content Trap: A Strategist's Guide to Digital Change

by Bharat Anand  · 17 Oct 2016  · 554pp  · 149,489 words

nearly three centuries. Until now. The same digital technologies and phenomena that impacted these other businesses are now creating cataclysms in education, too: broadband delivery, multisided platforms, apps, search, new devices, and software innovations. And in this world, just as in other content businesses, doomsday scenarios are plentiful, digital possibilities are simultaneously

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. Lakhani. “Experiments in Open Innovation at Harvard Medical School.” MIT Sloan Management Review 54, no. 3 (Spring 2013): 45–52. Hagiu, Andrei. “Strategic Decisions for Multisided Platforms.” MIT Sloan Management Review, Winter 2014. Hagiu, Andrei, and Simon Rothman. “Network Effects Aren’t Enough.” Harvard Business Review, April 2016. Hendricks, Ken, and Alan

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. Watts. “Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market.” Science, February 10, 2006. Seamans, Robert, and Feng Zhu. “Responses to Entry in Multi-Sided Markets: The Impact of Craigslist on Local Newspapers.” Management Science 60, no. 2 (February 2014): 476–93. Shachar, Ron, and Bharat Anand. “The Effectiveness and Targeting

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1996 Nick Statt, “Rare Pokemon Card Attracts Record-Breaking $50k Offers on eBay,” CNET , September 5, 2013. indirect network effects Andrei Hagiu, “Strategic Decisions for Multisided Platforms,” MIT Sloan Management Review , Winter 2014; Andrei Hagiu and Simon Rothman, “Network Effects Aren’t Enough,” Harvard Business Review, April 2016; and Rita McGrath, “The

Open for Business Harnessing the Power of Platform Ecosystems

by Lauren Turner Claire, Laure Claire Reillier and Benoit Reillier  · 14 Oct 2017  · 240pp  · 78,436 words

address them. Standing on the shoulders of giants Academics have recently redoubled their efforts to research platforms, a relatively new field of economics known as ‘multisided markets’ only first formalized in 2003 by French Nobel economist Jean Tirole. We are most definitely standing on the shoulders of giants, and this book would

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, participated in some of our lectures or simply retained our firm, Launchworks, to advise them. Note 1 The possible exception is an early book on multisided markets by D. Evans and R. Schmalensee, The Catalyst Code: The Strategies Behind the World’s Most Dynamic Companies, Boston, MA: Harvard Business School Press, 2007

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: wholesale goods (Alibaba), talent platforms (Upwork), operating systems (Windows), etc. In most business literature, platforms are either considered as ‘black boxes’ serving what economists call ‘multisided markets’, or assumed to operate like traditional firms. Unfortunately, neither approach provides much insight into platform businesses themselves. Many commentators use the generic term ‘platform’ to

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replacement of DOS by Windows. (c) Those concerned with economic transactions.5 Economists might, for example, say that eBay is a platform operating in a multisided market and enabling transactions between different consumer groups. PLATFORM A business creating significant value through the acquisition, matching and connection of two or more customer groups

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companies are not pure platforms, but ‘platform-powered ecosystems’ mixing different business models. What is a platform business? 23 Economics of platforms and multisided markets The concept of ‘multisided markets’ is a relatively recent one. As previously mentioned, we owe to the world of antitrust law the earliest detailed economic analysis of businesses operating

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as platforms. Visa and Mastercard may not have used the term multisided markets when they launched, but their operations – of connecting card users and merchants – clearly exhibited the economic characteristics of platform businesses.8 The concept of

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multisided markets started to be formalized by academics in 2000. Geoff Parker and Marshall Van Alstyne were among the first economists to look closely at platform business

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on the economics of card platforms in 2002. Their research proposed a new economic model of the price relationships used on both sides of a multisided market to better coordinate demand.10 While the main focus area of the paper was credit cards, the analysis and key findings apply more widely. The

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mutual interactions on their own; and (iv) rely on the catalyst to facilitate value-creating interactions between them.13 Evans has since written extensively about multisided markets and catalyst businesses in the context of payment networks and cards,14 as well as in broader antitrust contexts.15 His definition of ‘catalyst’ businesses16

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platforms that focused on the features of the market served, rather than the platform businesses themselves, would not have considered the taxi market as a multisided market (since it was initially served by traditional non-platform businesses). It is, however, undeniable that Uber uses a platform-centric business model to disrupt a

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content. This in turn attracts advertisers who need ‘eyeballs’ for their campaigns. Evans argues that media firms, and many publications, operate in such ‘audience building’ multisided markets. (iii) Demand coordinators: A third type of platform business focuses on coordinating demand within a given ecosystem. Unlike market makers, demand coordinators often have a

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firms struggle to compete against platform businesses and what options are available to them. Hagiu and Wright also proposed a focused definition of ‘multisided platforms’ (MSP). Their proposed definition is: Multisided platforms (MSPs) are organizations that create value primarily by enabling direct interactions between two (or more) distinct types of affiliated customers.21 This

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and product differentiation. Mark Armstrong, ‘Competition in Two-Sided Markets’, RAND Journal of Economics, 37(3), September 2006, 668–91, also proposed a model of multisided markets built upon similar theoretical foundations (but focused on membership externalities, as opposed to usage ones, as originally modelled by Rochet and Tirole) and offered a

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International, 2011, for competition issues arising in multisided businesses. Also referred to as ‘matchmakers’. See D. Evans and R. Schmalensee, Matchmakers: The New Economics of Multisided Platforms, Cambridge, MA: Harvard Business School Press, 2016. As of 26 September 2016. GMV stands for gross merchandise value and is used in online platforms to

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business on a sustainable basis. See David S. Evans and Richard Schmalensee, ‘The Antitrust Analysis of Multi-Sided Platform Businesses’ (Coase-Sandor Institute for Law and Economics Working Paper No. 623, 2012). 21 Andrei Hagiu and Julian Wright, ‘Multi-Sided Platforms’, Harvard Business School Working Paper 12-024, October 2011. 22 P. Evans and A. Gawer

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the core activities of firms serving multisided markets. Typically, we find that platforms need to: • • • • • attract a critical mass of customers on each side of the market; match them; allow them to connect; enable them to transact; and optimize their own operations and ecosystem iteratively. Launching a multisided platform requires a lot of energy

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User Growth Strategy’, 3 March 2015, https:// parantap.com/tinders-first-year-growth-strategy/. 13 D. Evans and R. Schmalensee, Matchmakers: The New Economics of Multisided Platforms, Cambridge, MA: Harvard Business School Press, 2016. 14 Bryan Hackett, ‘Tinder’s First Year User Growth Strategy’, 3 March 2015, https:// parantap.com/tinders-first

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, 130, 132; home automation 212 minimum viable product see MVP monetization 50, 67, 86, 100, 116, 142, 147 MSP (multisided platforms) 25, 46 multihoming 36–7, 149, 176, 177 multisided markets 5, 23–4, 46 multisided platforms see MSP MVP (minimum viable product) 91, 100–1 MyTaxi 93 negative externalities 32, 180 Netflix 26, 197 network

Modern Monopolies: What It Takes to Dominate the 21st Century Economy

by Alex Moazed and Nicholas L. Johnson  · 30 May 2016  · 324pp  · 89,875 words

. This is a come-for-the-tool-stay-for-the-network approach, as venture capitalist Chris Dixon says.15 You attract one side of your multisided platform by offering that user group value even if the other side never shows up. Many platforms that went this route were initially apps that provided

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://www.businessinsider.com/steve-blank-first-mover-advantage-overrated-2010-10. 35. For more detail, see David S. Evans, “Governing Bad Behavior by Users of Multi-Sided Platforms,” Berkeley Technology Law Journal 27, no. 2 (Fall 2012). 36. Angwin, Stealing Myspace. 37. Xu Lin, “First Impressions Count,” China Daily, http://www.chinaculture.org

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. Johnson. Description: First edition. | New York, N.Y. : St. Martin’s Press, [2016] Identifiers: LCCN 2015050147| ISBN 9781250091895 (hardcover) | ISBN 9781250091901 (e-book) Subjects: LCSH: Multi-sided platform businesses. | Technological innovations—Economic aspects. | Electronic commerce. Classification: LCC HD9999.M782 M63 2016 | DDC 338.8/2—dc23 LC record available at http://lccn.loc

The Age of Extraction: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity

by Tim Wu  · 4 Nov 2025  · 246pp  · 65,143 words

York : Alfred A. Knopf, 2025. | Includes bibliographical references and index. Identifiers: LCCN 2024060501 | ISBN 9780593321249 (hardcover) | ISBN 9780593321256 (ebook) | ISBN 9781524712952 (open-market) Subjects: LCSH: Multi-sided platform businesses. | Artificial intelligence—Economic aspects. | Technological innovations—Moral and ethical aspects. | Technological unemployment. Classification: LCC HD9999.M782 .W82 2025 | DDC 338.7—dc23/eng/20250327

Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You

by Sangeet Paul Choudary, Marshall W. van Alstyne and Geoffrey G. Parker  · 27 Mar 2016  · 421pp  · 110,406 words

the rules for governance is hard for one-sided platforms like the Keurig brewing system, it’s exponentially harder when platforms are multisided. After all, multisided platforms involve numerous interests that don’t always align. This makes it difficult for platform managers to ensure that various participants create value for one another

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of the market via transparency, quality, or insurance, thereby enabling good interactions to occur. It provides thickness, which enables participants from different sides of a multisided market to find one another more easily. It minimizes congestion, which hampers successful searches when too many people participate or low quality drives out high. And

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://www.theverge .com/2014/8/26/6067663/this-is-ubers-playbook-for-sabotaging-lyft. CHAPTER 11: POLICY 1. Kevin Boudreau and Andrei Hagiu, Platform Rules: Multi-Sided Platforms as Regulators (Cheltenham, UK: Edward Elgar, 2009), 163–89. 2. Malhotra and Van Alstyne, “The Dark Side of the Sharing Economy.” 3. Felix Gillette and

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, “Internetwork Externalities and Free Information Goods”; Parker and Van Alstyne, “Two-Sided Network Effects.” 25. David S. Evans and Richard Schmalensee, “The Antitrust Analysis of Multi-Sided Platform Businesses,” in The Oxford Handbook of International Antitrust Economics, vol. 1, edited by Roger D. Blair and D. Daniel Sokol (Oxford: Oxford University Press, 2015

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and the Diffusion of Mobile Telephony,” Review of Industrial Organization 26, no. 1 (2005): 89–113. 60. David Evans, “Governing Bad Behavior by Users of Multi-Sided Platforms,” Berkeley Technology Law Journal 27, no. 12 (Fall 2012), http://scholarship.law.berkeley.edu/cgi/viewcontent .cgi?article=1961&context=btlj. 61. Benjamin Edelman, “Digital

Cogs and Monsters: What Economics Is, and What It Should Be

by Diane Coyle  · 11 Oct 2021  · 305pp  · 75,697 words

apartment, the more consumers on the platform the better it is for you. Digital platforms of this kind are also known as two-sided or multisided markets (Evans and Schmalensee 2016a). These indirect network effects are also mutually reinforcing and encouraging of scale. All ‘sides’ of the platform can—at least potentially

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_gdp/index_en.html. Evans, David S., and Richard Schmalensee, 2016a, Matchmakers: The New Economics of Multisided Platforms, Boston, MA: Harvard Business School Press. Evans, David S., and Richard Schmalensee , 2016b, ‘The New Economics of Multi-Sided Platforms: A Guide to the Vocabulary (9 June), SSRN, https://ssrn.com/abstract=2793021 or http://dx.doi

The Myth of Capitalism: Monopolies and the Death of Competition

by Jonathan Tepper  · 20 Nov 2018  · 417pp  · 97,577 words

.vox.com/new-money/2017/7/11/15929014/end-of-the-internet-startup. 62. David S. Evans and Richard Schmalensee, Matchmakers: The New Economics of Multisided Platforms (Harvard Business Review Press, 2016). Kindle Edition, locations 322–323. 63. https://www.seattletimes.com/business/tech-giants-put-the-squeeze-on-startups-squelching-their

The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power

by Michael A. Cusumano, Annabelle Gawer and David B. Yoffie  · 6 May 2019  · 328pp  · 84,682 words

the book as accessible as possible to practitioners. We also appreciated her suggestions on the manuscript. Platforms are unique businesses driven by network effects and multisided market dynamics. Studying them was not a well-defined or popular topic among strategy and innovation scholars when we began our research and work with these

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governance that apply in any company and in any era. Platforms will not generate profits simply because of adept use of digital technology, a clever “multisided” market strategy, or classifying all employees as gig-economy contract workers. If sales rely on large subsidies of one or more market sides, and the platforms

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strategy or its product strategy. Take Apple as an example. Is this company so profitable and valuable primarily because of strong network effects and the multisided market strategy surrounding the iPhone, which now accounts for about 60 percent of revenues? Or does a large part of Apple’s market value come from

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was a one-sided platform because it targeted only individual telephone users, without making distinctions among them. Very quickly, though, the telephone business became a multisided market by identifying different segments—users who mostly made local calls versus those who needed long-distance services, and residential versus business users. Expanding usage among

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charge to manufacturers of smartphones and tablets but made money from selling advertisements that came through its search engine. There is nothing illegal about this multisided platform strategy. However, the European Commission alleged in 2016 that Google imposed conditions on mobile phone manufacturers and mobile phone operators aimed at protecting Google’s

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platforms that third parties can access and build upon for their own applications. Third, the logic of platform thinking, which is driven by network effects, multisided markets, and the potential for winner-take-all-or-most outcomes has led to growing market power concentrated in a small (but rising) number of firms

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a specific disease or to reengineer a plant to fight off insects. But, along with rising numbers of CRISPR researchers, platform-like network effects and multisided market dynamics are also appearing and helping the ecosystem grow. In particular, more research publications have led to improvements in tools and reusable component libraries, which

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How to Make Them Work for You (New York: W. W. Norton, 2016). 16.David S. Evans and Richard Schmalensee, Matchmakers: The New Economics of Multisided Platforms (Boston: Harvard Business Review Press, 2016). 17.Annabelle Gawer and Michael A. Cusumano, “How Companies Become Platform Leaders,” MIT Sloan Management Review 49, no. 2

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Finally Ready to Explain His Brain Research,” New York Times, October 14, 2018. 4.David S. Evans and Richard Schmalensee, Matchmakers: The New Economics of Multisided Platforms (Boston: Harvard Business Review Press, 2016). 5.Annabelle Gawer and Michael A. Cusumano, “How Companies Become Platform Leaders,” MIT Sloan Management Review 49, no. 2

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computers, 229 in video game arena, 44 multisided markets overview, 71 choosing your market sides, 69–71 engaging multiple sides of a market, 15–16, 41–42 future expectations, 219, 231–32 response of older industries to digital platforms, 159–60 telephone service as, 34 multisided platforms building on side to attract the other

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–11 platform market drivers, 29–62 overview, 25, 31–32, 49–50, 59–61 See also barriers to entry; differentiation and niche competition; multi-homing; multisided markets; network effects platform potential and future scenarios, 217–37 overview, 28, 217–20 CRISPR, 229–34 quantum computing, 226–29 voice recognition, 220–23 Platform

The Inner Lives of Markets: How People Shape Them—And They Shape Us

by Tim Sullivan  · 6 Jun 2016  · 252pp  · 73,131 words

that didn’t exist in 1945. And that smart phone in your pocket? It’s both a technological and market innovation, what economists call a multisided platform. You acquire apps—sometimes paying for them but not always—created by developers on the other side of the trade. The free apps survive by

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more on real world phenomena, leading researchers have turned their attention to platforms, bringing some much-needed clarity to the rules that dictate how these multisided markets work. As a result, we now have a deeper understanding of what makes a platform work and a set of guiding principles—many of which

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step in our global domination of the microprocessor business [cue evil laughter]”). Economists instead talk about two-sided markets or, as the case may be, multisided markets. You might reasonably ask what market doesn’t have two sides. You go to the supermarket, go job hunting, or hire a contractor to renovate

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to run into the guy stocking the bread on a quiet afternoon. But lots of markets involve more direct contact among their participants. These true multisided markets require an extra push to get off the ground and constant nurturing to reach their potential. The person who provides this extra push, the market

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age. If one of them comes up with a way of making the lemons market work, they’ll be richly rewarded for it. While every multisided market has its own eccentricities, there are some overarching principles like these, which can help to clarify where two-sided markets are most needed, and why

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the United States (Zelizer), 153 Morgenstern, Oskar, 25–27 mortality rates, of Japanese vs German POW camps, 10–13 MS-13 gang, 67 multisided markets, 108–112, 118–124 multisided platform, 14 multiunit Vickrey auction, 93 Murphy, Frank, 9 Nasar, Sylvia, 29 Nash, John, 32 National Archives’ World War II Prisoners of War Data

Virtual Competition

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The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future

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Reinventing Capitalism in the Age of Big Data

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The Costs of Connection: How Data Is Colonizing Human Life and Appropriating It for Capitalism

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The Hype Machine: How Social Media Disrupts Our Elections, Our Economy, and Our Health--And How We Must Adapt

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