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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

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

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

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Armin Mertens / Marc Scheufen in European Journal of Law and Economics External Publication 29. May 2024

Intellectual property and fourth industrial revolution technologies: how the patent system is shaping the future in the data-driven economy

Using the classification system from the European Patent Office (EPO), we identify almost 600,000 patent applications for fourth industrial revolution technologies from 1986 to 2015.

IW

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Thomas Eger / Marc Scheufen in European Journal of Law and Economics External Publication 27. May 2024

The Law and Economics of the Data Economy: Introduction to the Special Issue

This article intends to provide a framework to better understand the economic problems and legal challenges resulting from the transition of the European economy to a data economy.

IW

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