Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The economics of platforms is different from what we normally study as markets.In an exchange, we know that the way we ensure we are profitable
The economics of platforms is different from what we normally study as markets.In an exchange, we know that the way we ensure we are profitable by having a value gap advantage or by successfully excluding customers.This thumb rule does not work for platforms.Why?
6969 Platforms are unlike companies and don't provide any product or service Platforms are subject to the effects of indirect network effects Platforms adopt a pricing model where there is a money side and another subsidy side (9 Platform are subject to effects of network effects Platforms impose large switching costs on their customersStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started