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Vera Demary / Christian Rusche IW-Analyse No. 123 13. September 2018 The Economics of Platforms

Digital platforms already dominate the top 10 of the world’s most valuable firms. The specific characteristics of their business model, such as quick growth and market power soon after market entry, have provoked public discourse.

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The Economics of Platforms
Vera Demary / Christian Rusche IW-Analyse No. 123 13. September 2018

The Economics of Platforms

IW-Analyse

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German Economic Institute (IW) German Economic Institute (IW)

Digital platforms already dominate the top 10 of the world’s most valuable firms. The specific characteristics of their business model, such as quick growth and market power soon after market entry, have provoked public discourse.

This paper analyzes digital platforms’ business models, the reasons for their success and the challenges they present. Digital platforms offer an online forum for conducting transactions and therefore are able to dramatically reduce transaction costs, which creates value for platform users. Generally, digital platforms are aware of the high and increasing importance of data. By collecting and combining data from the different user groups, digital platforms are able to improve their service for existing users and to attract new user groups. Digital platforms’ market power and their control over large, valuable sets of data have attracted the attention of regulatory authorities and led to investigations and fines. Economic policy should aim to protect consumers while still fostering the digital platform business model.

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Download PDF
The Economics of Platforms
Vera Demary / Christian Rusche IW-Analyse No. 123 13. September 2018

Vera Demary / Christian Rusche: The Economics of Platforms

IW-Analyse

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German Economic Institute (IW) German Economic Institute (IW)

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Status Quo and Use Cases in Germany
Jan Büchel / Barbara Engels IW-Report No. 53 20. October 2022

Industry trends in data sharing: Status Quo and Use Cases in Germany

Data is generated everywhere along the value chain. Each player produces data specifically or as a by-product at various points in the production process. This data can offer significant benefits for the companies themselves and for the economy as a whole.

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Jan Büchel / Hans-Peter Klös IW-Report No. 42 24. August 2022

Metaverse: Hype or "next big thing"?

Not only since the Facebook group renamed itself Meta in October 2021 has the topic of metaverse gained substantial importance. Experiences due to the corona pandemic have also spurred digital applications to a great extent.

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