Working Paper No. 748

Efficiency and the Provision of Open Platforms

Published: April 28, 2008Pages: 16Keywords: Platforms; Two-sided Markets; Open versus ClosedJEL-codes: D40; L10

Efficiency and the Provision of Open Platforms Joacim Tåg


Private firms may not have efficient incentives to allow third-party producers to access their platform or develop extensions for their products. Based on a two-sided market model, I discuss two reasons for why. First, a private firm may not be able to internalize all benefits from cross-group externalities arising with third-party extensions. Second, firms may have strategic incentives to shut out third-parties because it relaxes competition.

Joacim Tåg

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An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

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The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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