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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Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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