I develop a general theory of monopoly pricing of networks. Platforms use insulating tariffs to avoid coordination failure, implementing any desired allocation. Profit-maximization distorts in the spirit of Spence (1975) by internalizing only network externalities to marginal users. Thus the empirical and prescriptive content of the popular Rochet and Tirole (2006) model of two-sided markets turns on the nature of user heterogeneity. I propose a more plausible, yet equally tractable, model of heterogeneity in which users differ in their income or scale. My approach provides a general measure of market power and helps predict the effects of price regulation and mergers.

Over the past ten years, there has been growing interest in the process of strategic decision-making among both managers and researchers. Strategic decisions are important for five main reasons: They are large-scale, risky and hard to reverse; they are a bridge between deliberate and emerging strategies; they can be a major source of organizational learning; they play an important part in the development of individual managers and they cut accross functions and academic disciplines. Strategic Decisions summarizes the current state of the art in research on strategic decision-making, with chapters prepared by leading strategy researchers. The editors also present implications for current application and proposed directions for future research.

A different kind of matchmaker. Many of the most dynamic public companies, from Alibaba to Facebook to Visa, and the most valuable start-ups, such as Airbnb and Uber, are matchmakers that connect one group of customers with another group of customers. Economists call matchmakers multisided platforms because they provide physical or virtual platforms for multiple groups to get together. Dating sites connect people with potential matches, for example, and ride-sharing apps do the same for drivers and riders. Although matchmakers have been around for millennia, they’re becoming more and more popular—and profitable—due to dramatic advances in technology, and a lot of companies that have managed to crack the code of this business model have become today’s power brokers. Don’t let the flashy successes fool you, though. Starting a matchmaker is one of the toughest business challenges, and almost everyone who tries to build one, fails. In Matchmakers, David Evans and Richard Schmalensee, two economists who were among the first to analyze multisided platforms and discover their principles, and who’ve consulted for some of the most successful platform businesses in the world, explain how matchmakers work best in practice, why they do what they do, and how entrepreneurs can improve their chances for success. Whether you’re an entrepreneur, an investor, a consumer, or an executive, your future will involve more and more multisided platforms, and Matchmakers—rich with stories from platform winners and losers—is the one book you’ll need in order to navigate this appealing but confusing world.

Digital platforms controlled by Alibaba, Alphabet, Amazon, Facebook, Netflix, Tencent and Uber have transformed not only the ways we do business, but also the very nature of people's everyday lives. It is of vital importance that we understand the economic principles governing how these platforms operate. This book explains the driving forces behind any platform business with a focus on network effects. The authors use short case studies and real-world applications to explain key concepts such as how platforms manage network effects and which price and non-price strategies they choose. This self-contained text is the first to offer a systematic and formalized account of what platforms are and how they operate, concisely incorporating path-breaking insights in economics over the last twenty years.

Harnessing the power of software platforms: what executives and entrepreneurs must know about how to use this technology to transform industries and how to develop the strategies that will create value and drive profits. Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution—a revolution that will change both new and old industries. The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits. Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

Many studies predict massive job losses and real wage decline as a result of the ongoing widespread automation of production, a trend that may be further aggravated by the COVID-19 crisis. Yet automation is also expected to raise productivity and output. How can we share the gains from automation more widely, for the benefit of all? And what are the attendant equity-efficiency trade-offs? We analyze this issue by considering the effects of fiscal policies that seek to redistribute the gains from automation and address income inequality. We use a dynamic general equilibrium model with monopolistic competition, including a novel specification linking corporate power to automation. While fiscal policy cannot eliminate the classic equity-efficiency trade-offs, it can help improve them, reducing inequality at small or no loss of output. This is particularly so when policy takes advantage of novel, less distortive transmission channels of fiscal policy created by the empirically observed link between corporate market power and automation.

Der Autor untersucht interdisziplinär, inwieweit Art. 102 AEUV geeignet ist, den Wettbewerb vor dem missbräuchlichen Verhalten marktbeherrschender Plattformen zu schützen. Nach einer ersten Erörterung der Grundlagen der digitalen Wirtschaft, insbesondere Big Data und mehrseitige Plattformen, werden die relevanten Konzepte, die von EU-Kommission und EU-Gerichten in ihrer Entscheidungspraxis zur Auslegung von Art. 102 AEUV entwickelt wurden, näher beleuchtet, um ihre Eignung für das Missbrauchsverbot mit Blick auf Plattformbetreiber vor dem Hintergrund der Besonderheiten mehrseitiger Märkte zu bewerten. Auch das Vorhandensein und die Abgrenzung eines Datenmarktes werden diskutiert.