(Revised October 2007)
Platform-Mediated Networks: Definitions and Core Concepts
Defines platform-mediated networks and introduces concepts central to their study. First, it defines networks and network effects; explains how network effects influence users' willingness-to-pay for network access; describes factors that determine the strength of network effects; discusses how a network's success may depend upon users' expectations about its growth prospects; defines network externalities and their significance; presents a taxonomy of networks based on the number of distinct user groups--sides--that they encompass; and explains why network effects should be viewed as demand-related rather than supply-related scale economies. Second, it defines platforms; describes different roles that firms play in platform creation and maintenance; discusses platform boundaries, for example, the distinction between platform providers and network users; and presents schemes for categorizing platforms based on their principal function, the structure of the networks they serve, and who controls them.
Keywords: Consumer Behavior;