Private Regulation by Platform Operators – Implications for Usage Intensity

Claussen, Jörg ; Kretschmer, Tobias and Mayrhofer, Philip (May 2010): Private Regulation by Platform Operators – Implications for Usage Intensity. Discussion Papers in Business Administration 2010-6

Abstract

Platforms operators act as private regulators to increase usage and maximize profits. Their goals depend on the development of the platform: overcoming the chicken-egg problem early on requires attracting platform participants while quality becomes more important later on. Private regulators influence third-party business models, entry barriers, and usage intensity. We analyze how drivers of usage intensity on Facebook’s application platform were affected by a policy change that increased quality incentives for applications. This change led to the number of installations of each application becoming less important, applications in more concentrated sub-markets achieving higher usage, and applications staying attractive for longer.

• Item Type: Paper
• Form of publication: Preprint
• Keywords: private regulation multi-sided platforms usage intensity
• Faculties: Munich School of Management; Munich School of Management > Discussion Papers; Munich School of Management > Discussion Papers > Communication Economics
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: L1, L50, O33
• Language: English