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  3. American Economic Review
  4. May 2017
  5. Multidimensional Platform Design

Multidimensional Platform Design

  • André Veiga
  • E. Glen Weyl
  • Alexander White
American Economic Review
vol. 107, no. 5, May 2017
(pp. 191-95)
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Abstract

Successful platforms attract not just many users, but also those of the right kind. 'The right kind of user' is one who can either be directly monetized or who differentially attracts other valuable users. Bonacich centrality on the network of user sorting with direct value of monetization captures this feedback loop and thus characterizes the value of user characteristics. We use this value to determine optimal steady-state platform design and reliable means for platforms to reach such a steady state. We apply these results respectively to explain the dynamic growth strategy of social networks and urban development policies of cities.

Citation

Veiga, André, E. Glen Weyl, and Alexander White. 2017. "Multidimensional Platform Design." American Economic Review, 107 (5): 191-95. DOI: 10.1257/aer.p20171044

Additional Materials

JEL Classification

  • D42 Market Structure, Pricing, and Design: Monopoly
  • D85 Network Formation and Analysis: Theory
  • R58 Regional Development Planning and Policy
  • Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification