Platform Externalities: Beyond the N In Network Effects
Loading...
Access rights
openAccess
publishedVersion
URL
Journal Title
Journal ISSN
Volume Title
A4 Artikkeli konferenssijulkaisussa
This publication is imported from Aalto University research portal.
View publication in the Research portal (opens in new window)
View/Open full text file from the Research portal (opens in new window)
View publication in the Research portal (opens in new window)
View/Open full text file from the Research portal (opens in new window)
Date
2021
Major/Subject
Mcode
Degree programme
Language
en
Pages
39
Series
DRUID21 Conference, Copenhagen Business School, Copenhagen, Denmark October 18-20, 2021
Abstract
Network effects have been theorized as the defining growth mechanism in platform markets. The increase in the number of platform participants (N) fuels a virtuous cycle of growth, a network effect. However, beyond the N, what are the distinct qualitative attributes that drive the increasing value for a particular side of a platform as the number (quantity) of participants increases? To answer to this question, we develop a theory of platform externalities to provide three novel contributions to the understanding of platform markets. First, we clarify the role of network externalities and network effects in causing the self-reinforcing growth of value in platform markets. Second, to move beyond the N, we identify four specific externalities in platform markets - quantity, variety, utility, and accumulation - which we call platform externalities. We also clarify the role of complementarity in case of variety and accumulation externalities. Third, we highlight the negative counterparts for each of the four platform externalities. Our explicit theorization calls for delineating platform strategy theories that rely on network effects to recognize distinct platform externalities and their negative counterpartsDescription
Keywords
Other note
Citation
Karhu , K , Heiskala , M , Ritala , P & Thomas , L D W 2021 , Platform Externalities: Beyond the N In Network Effects . in DRUID21 Conference, Copenhagen Business School, Copenhagen, Denmark October 18-20, 2021 . , 6068 , DRUID21 Conference , Copenhagen , Denmark , 18/10/2021 .