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An entity that brings together different groups of economic agents and facilitates interaction among them by managing NE and therefore creating value for all participants.
Business opportunity exists for a platform (3)
Value of Platforms
Illustration of reduction in transaction costs (Uber)
Even with technology easing communication (e.g. FB groups to communicate between riders and drivers) a platform still adds a great deal of value by reducing transaction costs.
Network Effects (NE) (2)
- Within- group NE (WGNE)
- Cross- group NE (CGNE)
Within- Group NE (WGNE)
How does an agent’s decision to join (or how much to interact on) the platform affect the well-being of other agents in her own group?
Cross- Group NE (CGNE)
How does an agent’s decision to join (or how much to interact on) the platform affect the well-being of other agents in another group?
Cross- group NE (4)
- Attraction spillover
- Mutual attraction spiral
- Attraction/ Repulsion pendulum
- No group is interested in connecting with other, so interaction should simply be avoided
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Paul Baumgartner - Lehrmittel für Elektroberufe
Schweizerischer Verband der Lehrkräfte für Wirtschaft und Recht
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