Platform providers connect two groups that interact through, or on, a platform. For example, Apple develops smartphones that connect consumers with app, music, and video producers. Once consumers own a smartphone they can purchase this content and use it on their phone. Other examples of platform industries are video game consoles that connect gamers with video game developers, eReaders that connect readers with book publishers, ride-sharing platforms like Uber that connect drivers with passengers, and online marketplaces that connect buyers with sellers.A critical feature of these two-sided markets is that there are indirect network externalities between the two sides of the market. In the case of smartphones, consumers benefit from greater content availability on their smartphone while content providers benefit from greater sales when there are more consumers that own smartphones. In this dissertation I develop three chapters that investigate two-sided platforms. Study of these markets is important because of their rapid rise in the economy and their unique structure. In fact, many of my results differ from those found in traditional industrial organization models that do not incorporate two-sidedness.
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