The Evolution of Platform Competition Models: Achievements and Challenges

The article examines the evolution of platform-competition models, their theoretical underpinnings, principal developmental milestones, and contemporary challenges. Special emphasis is placed on the historical progression – from the early ideas of reducing transaction costs and the intermediary role to the first formal approaches to two-sided markets. The core concepts that underpin platform theory are described, including direct and cross-side network effects, information-asymmetry theories, and nonlinear pricing models. Subsequent sections analyze the stages of formalization: the emergence of the first pricing and multi-homing models, empirical studies of network effects in print compendia, and the expansion of the analytical framework for the study of platform markets. In the review of recent research, new models are considered that incorporate user loyalty, the dynamics of entrant competition, and an arbitrary number of platforms. Key limitations of existing approaches are identified: universal assumptions of agent symmetry and environmental homogeneity, insufficient empirical validation, and the neglect of sectoral and national specificities. It is argued that these shortcomings diminish the models’ practical relevance and may lead to misguided recommendations for regulators and industry. The necessity of shifting from the development of standalone models to the creation of modular frameworks with extensible components – market structure, pricing, multi-homing, and other modules reflecting national and sectoral particularities – is substantiated. An integrative approach is proposed, embedding empirical validation at every modelling stage and actively employing interdisciplinary methods (machine learning, statistical analysis, network analysis). Such a methodology would ensure model adaptability to real-world conditions and enhance the quality of strategic decision-making in the regulation and management of digital platforms.

platform economics, platform competition, digital platforms, two-sided markets, network effects, industrial organization

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