TSP microfoundations and strategies 01062007（TSP微观基础和策略01062007）.pdfVIP

07-094 Multi-Sided Platforms: From Microfoundations to Design and Expansion Strategies Andrei Hagiu Copyright © 2007 by Andrei Hagiu Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. MULTI-SIDED PLATFORMS : FROM MICROFOUNDATIONS TO DESIGN AND EXPANSION STRATEGIES ANDREI HAGIU1 TH NOVEMBER 15 2006 Abstract Multi-sided platforms (MSPs), which bring together two or more interdependent groups of customers, have recently risen to economic and business prominence in many industries. This paper first lays out a simple micro-founded framework which aims to organize academic and managerial thinking about MSPs. It argues that any MSP performs one or both among two fundamental functions: reducing search costs and reducing shared transaction costs among its multiple sides. Using a variety of illustrations, the framework is then used to formulate general principles driving MSP design and expansion strategies: choosing the relevant platform “sides”, deciding which fundamental activities to perform and trading off depth against scope of MSP functions. Keywords: Multi–Sided Markets, Multi-Sided Platforms, Microfoundations. JEL Classification: L10, L21, L22, M21.