Web3 and the Future of the Digital Platform Economy: The Tricky Business of Finding the “Just Right” Level of Decentralization
Year: 2024
Type: article
Abstract: Digital platforms dominate our economyWithout a doubt, platform business models have revolutionized almost every industry, from e-commerce (Amazon) and operating systems (iOS and Android) to transportation (Uber), film (Netflix) and hospitality (Airbnb).In 2023, four out of the five most valuable companies worldwide operated based on platform business models.Often, these platform business models have made services more accessible and significantly reduced costs for their users.Platform business models enable the platform provider, as the intermediary, to make these improvements at low costs for their users as network effects lock in users and allow the provider to collect and monetize their data.This mechanism often leads to one strong player dominating the market, allowing them to monetize their monopoly-like position.The recent upsurge in artificial intelligence (AI) has fostered fears that these platform businesses might become even more powerful.More than ever, critics are concerned that current regulations fail to mitigate these dynamics, as antitrust regulations have failed to prevent platform providers from acquiring even more market power.Regulators are often fighting an uphill battle as the platform businesses can often rely on much deeper pockets and smart lawyers who find new ways to play down their employers' real power.
Authors: Hanna Halaburda, Daniel Obermeier
Institution: New York University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4403782887