DIGITAL ECONOMY
, Digital Platforms and Marketplaces
• Digital platforms act as intermediaries, connecting different groups (buyers
sellers, users & service providers). They operate as two-sided markets,
benefiting both sides through network effects (more users = more value). A
the resulting platform power they accumulate.
• 1. Two-Sided Markets
• Platforms serve two distinct user groups that benefit from each other.
• The more users on one side, the more valuable it becomes for the other.
• Examples:
• E-commerce (Amazon, eBay): Connects sellers (who sell goods) with buy
(who purchase).
• Ride-Sharing (Uber, Lyft): Connects drivers (offering rides) with passenge
(who need transport).
• Social Media (Facebook, Instagram): Connects users (who create content)
with advertisers (who target users).
, • 2. Network Effects
• When more people use a platform, its value increases.
• Types:
• Direct Network Effects: More users = more value for everyone (e.g.,
Facebook – more friends to connect with).
• Indirect (Cross-Side) Network Effects: More users on one side attract
more on the other (e.g., More buyers on Amazon → more sellers join).
, Digital Platforms and Marketplaces
• Digital platforms act as intermediaries, connecting different groups (buyers
sellers, users & service providers). They operate as two-sided markets,
benefiting both sides through network effects (more users = more value). A
the resulting platform power they accumulate.
• 1. Two-Sided Markets
• Platforms serve two distinct user groups that benefit from each other.
• The more users on one side, the more valuable it becomes for the other.
• Examples:
• E-commerce (Amazon, eBay): Connects sellers (who sell goods) with buy
(who purchase).
• Ride-Sharing (Uber, Lyft): Connects drivers (offering rides) with passenge
(who need transport).
• Social Media (Facebook, Instagram): Connects users (who create content)
with advertisers (who target users).
, • 2. Network Effects
• When more people use a platform, its value increases.
• Types:
• Direct Network Effects: More users = more value for everyone (e.g.,
Facebook – more friends to connect with).
• Indirect (Cross-Side) Network Effects: More users on one side attract
more on the other (e.g., More buyers on Amazon → more sellers join).
