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When Should a Platform Give People Fewer Choices and Charge More for Them?

BY | July 30, 2010

Hanna Halaburda, Mikolaj Jan Piskorski, Jul 27, 2010 Existing economic wisdom offers unequivocal advice to managers seeking to establish new platform businesses: Invest to acquire users as quickly as possible…

Hanna Halaburda, Mikolaj Jan Piskorski, Jul 27, 2010

Existing economic wisdom offers unequivocal advice to managers seeking to establish new platform businesses: Invest to acquire users as quickly as possible and make sure that they have unrestricted access to each other. Since the value of participating in a platform often depends on the number of choices offered, a platform offering unrestricted access should quickly displace a platform that restricts choice. After all, Facebook would not sta

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