مقاله سال ۲۰۱۶

In many economic situations, distinct groups of economic agents would benefit from interacting with one another but often fail to organize this interaction by their own forces because of high transaction costs or free-riding problems. There exists then a business opportunity for so-called multi-sided platforms (MSPs) to intermediate between the groups, so as to facilitate the interaction. By substantially bringing down transaction costs, the Internet and digital technologies have been a catalyst for the development of MSPs in a large variety of settings. Besides transaction systems (which provide a method for payment to buyers and sellers that are willing to use it; e.g., Visa, PayPal), exchanges (which help ‘buyers’ and ‘sellers’ search for feasible contracts and for the best prices; e.g., eBay, Booking.com), hardware & software systems (which allow applications developers and end users to interact; e.g., Mac OS, PlayStation), or matchmakers (which help members of one group to find the right ‘match’ within another group; e.g., Monster, Meetic), recent years have seen the emergence of peer-to-peer marketplaces (which facilitate the exchange of goods and services between ‘peers’; e.g., Airbnb, Uber) and crowdfunding platforms (which allow entrepreneurs to raise funds from a ‘crowd’ of investors; e.g., Kickstarter, LendingClub).

The main function of MSPs is to internalize the external effects that the interaction between the various groups generate. Of primary interest are cross-group external effects, which make the well-being of the members of one group depend on the participation of the members of another group. In most of the examples given above, the cross-group effects are positive as each group benefits from a larger participation of other groups. Think, e.g., of merchants and clients for the Visa card, of game developers and gamers for the PlayStation, or of hosts and guests for Airbnb; in each example, the platform becomes more attractive for one group as it is more largely used by the other group. Negative cross-group effects are mainly observed on adfinanced media platforms; typically, as advertising is seen as a nuisance, a larger participation of the group of advertisers negatively affects the utility that the media platform brings to its end-users.

It is natural to focus on cross-group effects as they directly stem from the desire of the various groups to interact and, thereby, give their raison d’ˆetre to MSPs. However, when deciding on their strategies, MSPs must also factor in the potential existence of within-group external effects. These effects describe the fact that the attractiveness of a platform for the members of one group depends on the participation of the members of the very same group. Within-group effects are negative when the members of one group compete with one another to interact with the other group or because of some form of congestion.1 In contrast, there also exist sources of positive within-group effects.2