The Economics of Digital Platforms and Marketplaces

This paper ventures into the digital economics of leading providers and examines how they design their business models and pricing frameworks and the network effect that governs their size. In particular, two-sided markets are of interest, in which platforms cater to two independent customer groups, generally buyers and sellers. By their very existence, such platforms present a challenge in analyzing the effects of changes in supply and demand. Furthermore, the document scrutinizes the regulation and antitrust of such states, arguing that the presented law may not be effective for this new business model. Finally, a few case studies are presented to showcase how such companies have reshaped their respective industries in the 21st century.