M&E
M&E
M&E
Set of flashcards Details
Flashcards | 95 |
---|---|
Language | Deutsch |
Category | Computer Science |
Level | University |
Created / Updated | 09.10.2020 / 04.04.2021 |
Licencing | Not defined |
Weblink |
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Platform
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)
- A set of economic agents wish to interact
- The interaction generates NE: One agent’s decisions as to whether and how much to interact affect the well-being of other agents.
- An intermediary is more efficient in organizing the interaction.
Value of Platforms
- NE make it hard for individuals to organize interactions, even if these are valuable for everyone.
- The benefit an agent gets from joining a network depends on how many other people join as well
- If the agent doesn’t expect anybody else to join, she doesn’t join either
- Everybody loses, even if all would be better off joining!
- Platforms can solve this coordination problem -> valuable interactions easier to organize by reducing transaction costs.
- Basically, platforms sell transactions costs’ reductions (not necessarily sell a product)
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.
- Trust issues
- Help coordination -> Dispatch based on proximity
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