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Multidimensional Platform Design

André Veiga¹; E. Glen Weyl²; Alexander White³

¹ Department of Economics and Nuffield College, University of Oxford, Manor Road Building, Oxford OX1 3UQ, UK (e-mail: ) · ² Microsoft Research, 641 Avenue of the Americas, New York, NY 10011 and Yale University Department of Economics and Law School (e-mail: ) · ³ School of Economics and Management and National Institute for Fiscal Studies, Tsinghua University, Weilun Building, 100084 Beijing China (e-mail: )

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.

DOI

10.1257/aer.p20171044

Volume

107 (5)

Pages

191-195

Language

en

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BibTeX

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