David S. Evans

Richard Schmalensee

Amazon. Alibaba. Facebook. Uber. These types of businesses--known as platforms, or multi-sided markets--are driving the economy more than ever. In an environment where markets, consumers, and technology are ever changing and increasingly interdependent, these businesses, which bring together a number of groups who need each other and make it easy for them to work together, are essential. But platforms operate very differently than traditional, one-sided businesses (like, say, grocery stores), and their logic can seem not only counterintuitive but downright counterproductive. Think about a traditional platform like a mall, which connects many different customers to many different stores. They charge their largest stores--the anchors--the lowest fees, while they charge smaller retailers and kiosks higher fees (and they don’t charge customers at all, even though they could conceivably charge for something like parking). That pricing structure makes sense, even though it may seem discriminatory, because the anchor stores are key to getting customers to show up. But there are still more twists and turns to how platforms operate. Plus, while the platform business model may seem appealing, it can be difficult to know if you should transform your business and--even if you should--how to do it. Yet companies that transform their pricing practices, incentive plans, and organizational structures are today’s power brokers. InMatchmakers, David Evans and Richard Schmalensee, two economists who were among the first to analyze platform businesses and discover their principles, explain the logic of platforms and how to analyze your own opportunities. Rich with stories from the platform winners as well as from those who mismanaged the transition,Matchmakers will be the one book readers need in order to navigate the appealing but confusing world of multi-sided markets.

The New Economics of Multisided Platforms

Matchmakers

The Digital Revolution in Buying and Borrowing

Paying with Plastic, 2nd Edition

Andrei Hagiu

How Software Platforms Drive Innovation and Transform Industries

Invisible Engines

Harnessing the power of software platforms: what executives and entrepreneurs must know about how to use this technology to transform industries and how to develop the strategies that will create value and drive profits. Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution—a revolution that will change both new and old industries. The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits. Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

Key economists for the government and for the Microsoft Corporation lay out their views on the key issues and then respond to the views presented by the opposing side.

Two Opposing Views

Did Microsoft Harm Consumers?

The definitive account of the trillion-dollar payment card industry. The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided markets: those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes—including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce—that could alter the payment card industry dramatically in the years to come.

Paying with Plastic, second edition

Terence J. Deeming

Betty Hall Evans

Stephen Goldfarb

Sir John Herschel, one of the founders of Southern Hemisphere astronomy, was a man of extraordinarily wide interests. He made contributions to botany, geology, and ornithology, as well as to astronomy, chemistry, and mathematics. Throughout his scientific career he kept a diary, recording his public and private life. The diaries from 1834 to 1838, years he spent making astronomical observations at the Cape of Good Hope, are reproduced in this book and prove to be much more than an ordinary scientist’s logbook. They present personal and social history, literary commentaries, the results of close observations of nature and numerous scientific experiments, the excitement of travel, political intrigues, gossip, and philosophical reflections—all interpreted through an alert and versatile mind. In the present transcription, the material has been enriched with selected correspondence of Sir John and his wife Lady Herschel (née Margaret Brodie Stewart). Sir John devoted his working time at the Cape primarily to a systematic observation of the southern sky, complementing his earlier “sweeping” of the northern sky at Slough, England. He later became one of the founders of photography, but at the Cape he used a simple optical device, the camera lucida, in the production of numerous landscape drawings. Many of these, along with reproductions of sketches contained in the diaries and botanical drawings made by Sir John and Lady Herschel, are used to illustrate this book. Sir John was also a leading figure in the foundation of the educational system of the Cape and a supporter of exploratory expeditions into the interior. As the son of Sir William Herschel, in his day the most famous British astronomer and the discoverer of the planet Uranus, Sir John was already celebrated when he arrived from England. Every individual of note, resident at the Cape or visiting, went to see him. He was supported in his work by his wife, who ran an enormous establishment and bore a huge family, but who nevertheless found time to travel in the country around the western Cape with him and to assist in his observations. The diaries and letters are supplemented by especially valuable editorial notes that provide much needed and highly interesting information concerning persons and events mentioned and described by Sir John. All the original manuscript material used in this volume is archived at the Harry Ransom Center at the University of Texas at Austin. Sir John’s camera lucida drawings are from the South African Public Library in Cape Town.

Diaries and Correspondence of Sir John Herschel, 1834-1838

Herschel at the Cape

No antitrust case in recent history has attracted as much public attention as U.S v. Microsoft Corp. Nor has any antitrust case in memory raised as many complex, substantive issues of law, economics and public policy. Microsoft, Antitrust and the New Economy: Selected Essays constitutes an early effort to analyze some of the central issues and to put the case in the context of the ongoing debate over the role of government in managing markets - especially in technology driven New Economy industries. All of these essays, it should be noted, are written by critics of the government's efforts to regulate Microsoft. Indeed, many are by individuals who were closely involved in the company's legal defense and served as consultants to Microsoft. But their work should be judged on the merits rather than their provenance. For all represent serious scholarship by researchers committed to advancing the debate over government regulatory policies.

David S. Evans

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