Andrei Hagiu

Associate Professor of Business Administration

Andrei is an Associate Professor in the Strategy group at Harvard Business School. Andrei's research focuses on multi-sided markets, which feature platforms/intermediaries serving two or more distinct groups of customers, who value each other's participation. He is studying the business strategies used by such platforms and the economic structure of the industries in which they operate: videogames (e.g. OnLive, PlayStation, Wii), e-commerce (e.g. Amazon, eBay, Gazelle, Rakuten), smartphones (e.g. Android, iPhone), personal computers (e.g. Windows, Mac OS), shopping malls (e.g. Roppongi Hills), intellectual property (e.g. Intellectual Ventures, Ocean Tomo, RPX), payment systems (e.g. Edy, PayPal, Suica, Visa), online TV services (e.g. Brightcove, PCCW, PP Live), etc.  Andrei is using the insights derived from this research to advise companies in some of these industries. He is also occasionally involved in competition and industrial policy research and advisory projects in Japan, China, and in the United States.  

Andrei graduated from the Ecole Polytechnique and the Ecole Nationale de la Statistique et Adminstration Economique in France with an MS in economics and statistics, before obtaining a PhD in economics from Princeton University.  Prior to joining HBS, he spent 18 months in Tokyo as a fellow at the Research Institute of Economy Trade and Industry, an economic policy think-tank affiliated with the Japanese Ministry of Economy Trade and Industry.

  1. Do You Really Want to Be an eBay?

    Most companies that serve as intermediaries between buyers and sellers face a fundamental strategy decision: Should they be resellers (like supermarkets), acquiring and then reselling products or services? Should they operate as multisided platforms (like eBay), connecting buyers and sellers without controlling or owning the offerings being sold? Or should they blend the two models?
  2. The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators

    The patent market consists mainly of privately negotiated, bilateral transactions, either sales or cross-licenses, between large companies. There is no eBay, Amazon, New York Stock Exchange, or Kelley's Blue Book equivalent for patents, and when buyers and sellers do manage to find each other, they usually negotiate under enormous uncertainty: prices of similar patents vary widely from transaction to transaction and the terms of the transactions (including prices) are often secret and confidential. Inefficient and illiquid markets, such as the one for patents, generally create profit opportunities for intermediaries. We begin with an overview of the problems that arise in patent markets, and how traditional institutions like patent brokers, patent pools, and standard-setting organizations have sought to address them. During the last decade, a variety of novel patent intermediaries has emerged. We discuss how several online platforms have started services for buying and selling patents but have failed to gain meaningful traction. And new intermediaries that we call defensive patent aggregators and superaggregators have become quite influential and controversial in the technology industries they touch. The goal of this paper is to shed light on the role and efficiency tradeoffs of these new patent intermediaries. Finally, we offer a provisional assessment of how the new patent intermediary institutions affect economic welfare.
  3. How Facebook Can Totally Undermine Apple and Google in the Platform Games

    Today, Facebook seems like the juggernaut crushing everything in its path, most recently Twitter’s Vine app and Yandex’s social app. And in its last quarter, Facebook’s mobile usage surpassed its web usage — for the first time ever.

    This is important because Facebook has now begun competing not just at the social network level, but also at the operating system level. And the company turns nine today so it will have even more mobile influence by its 10th anniversary: Just look at the rapid expansion of its App Center and SDK developer tools for iOS.

    This means we won’t just have competing platforms, but platforms built on top of other platforms. And that, as you’ll see, changes the game altogether.

  4. Social Networks Will Change Product Innovation

    Much is being written about the impact that new communication technologies and channels (blogs, Facebook, Twitter, YouTube) have on traditional marketing. The deeper question is: Will these new communication channels actually force material changes not just in the way companies market their products but in the strategies and operations they use to develop and build those products as well? In my view, the answer is an emphatic yes. It's another instance of the proverbial medium that changes the content.

    The effects on large established companies and start-ups are different.

  5. Andrei Hagiu - Multi-Sided Platforms - Digital Inventor Conference GMU Law

    Panel Presentation in Arlington, Virginia at the George Mason University School of Law, February 24, 2012, for an Information Economy Project innovation and IP conference, The Digital Inventor: How Entrepreneurs Compete on Platforms http://iep.gmu.edu/event/innovation-conference-digital-inventor-how-entrepren....

    The assembly line of our knowledge-based economy begins with technology discovery and ends with the moving target of a consumer market. Connectivity is funded and rewarded through exchanges of time, money, and digital goods. The conversation in this conference will identify key priorities in technology policy for innovation, network investment, and content delivery models. Articles will be published in a special issue of the Journal of Law, Economics & Policy.

  6. Invisible Engines: How Software Platforms Drive Innovation and Transform Industries

    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.