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.

The Economics of Platforms
IW-Analyse
Institut der deutschen Wirtschaft (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.


Vera Demary / Christian Rusche: The Economics of Platforms
IW-Analyse
Institut der deutschen Wirtschaft (IW)
Künstliche Intelligenz als Ersatz für Märkte und Wettbewerb?
Der entscheidende Vorteil der dezentralen sozio-ökonomischen Koordination über Märkte liegt in der Kapazität zum Aufspüren und Verarbeiten von allokationsrelevanten Informationen, die zentralen Planern fehlt.
IW
The anti‑steering provision of Article 5 (4) of the DMA: a law and economics assessment on the business model of gatekeepers and business users
Data is a success factor for digital platforms and the core of their business model. The rationale behind this is that data allows for improving the matching process between users which creates value for the platform.
IW