Failure to Launch: Critical Mass in Platform Businesses

被引:143
作者
Evans, David S.
Schmalensee, Richard
机构
[1] University College London, University of Chicago Law School
关键词
network; two-sided; startup; platform; 2-SIDED MARKETS; COMPETITION;
D O I
10.2202/1446-9022.1256
中图分类号
F [经济];
学科分类号
02 ;
摘要
Platform businesses add value by facilitating interactions between customers who are attracted in part by network externalities. Two-sided platform business with low costs of reversing participation status have become more important with the rise of the Internet. This essay is concerned with new businesses of this sort and the initial critical mass hurdle that they generally seem to face. In a very general model, we show how this hurdle depends on the nature of network effects, the dynamics of customer behavior, and the distribution of customer tastes. Weak, plausible assumptions about adjustment processes imply that platforms must get a sufficient number of members of both sides on board to launch successfully.
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页数:27
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