Monthly Archives: June 2010

The Value of Expectations and Hype For Platforms

Network effects (direct or indirect) create the possibility of multiple (stable) equilibrium market configurations

What determines which equilibrium market configuration prevails?

  • EXPECTATIONS!

What determines/influences expectations?

  • Path-dependence (winner in last generation oftentimes expected to win in the current generation)
  • Platforms might use non-price coordination instruments to affect expectations in their favor: e.g. First-party games/applications/content
  • Public announcements & commitments (if feasible)

Here’s the link to the slides.