Working Paper Series
Open Versus Closed Platforms
Abstract: This paper studies an industry in which firms can choose
to provide open or closed platforms. Open platforms, as opposed to closed,
are extendable so third-party producers can develop extensions for them.
Building on a two-sided market model, I show that firms might prefer to
commit to keeping their platforms closed despite the fact that opening the
platform is costless and open platforms are more valuable to consumers. The
reason is that opening the platform may lead to intensified competition for
Keywords: Platforms; Software; Two-sided Markets; (follow links to similar papers)
JEL-Codes: D40; D42; D43; L10; L12; L13; L14; (follow links to similar papers)
17 pages, April 12, 2008, Revised August 28, 2008
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Full text versions of the paper:
- This paper is published as:
Tåg, Joacim, (2009), 'Competing Platforms and Third Party Application Developers', Communication & Strategies, Vol. 74, pages 95-114
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