This course is dedicated to comprehending the intricacies of digital platform, focusing on the economics of multi-sided platforms as exemplified by industry giants such as Alibaba, Amazon, Apple, Google, Meta, Microsoft, and Tencent. In contrast to traditional businesses, these platforms operate on network effects and data-driven models, presenting distinctive economic and strategic challenges. The course will utilize basic game theory and industrial organization models to guide students through the entire lifecycle of digital platform design, covering aspects from launch and competition to exit. This module combines theoretical models and empirical applications to provide cutting-edge and application-oriented instruction.
Learning Objectives
After successful completion of the subject, students will be able to:
- Grasp the distinctive features that differentiate digital multi-sided platforms from conventional businesses
- Understand the operational mechanisms underpinning these platforms
- Develop the ability to conduct basic data analysis based on theoretical models
- Analyze and formulate strategies essential for effective platform design
Measurable Outcomes
- Participation in weekly in-class exercises that explore and compare the features of digital platforms with traditional businesses
- Analysis of the implementation of operational mechanisms underpinning digital platforms through group presentation on real-world platform
- Demonstration of understanding of digital platforms and their operational mechanisms through a midterm examination
- Evaluation of a platform’s performance through application of theoretical models to data analysis in case study
- Demonstration of effective platform design based on the formulation of strategies and models through group presentation
Course Requirement
(WEC: Writing, Expression, Communication)
| Assessment | Percentage |
| WEC – Class participation | 10 |
| WEC – Group presentation I | 15 |
| WEC – Midterm | 30 |
| WEC – Group presentation II | 30 |
| WEC – Individual report | 15 |
Weekly Schedule
Week 1: Introduction to Multi-Sided Platforms
- Explore the foundational concepts that define multi-sided platforms.
- Study different types of platforms with practical examples.
Week 2: Introduction to Market Structure
- Discuss firms’ strategies in monopoly and oligopoly market.
- Introduce to selected game theory models.
Week 3: Network Effects
- Understand the significance of network effects and their influence on platform dynamics.
- Discuss how to use network effects to help with platform design.
Week 4: Personalized Pricing Strategy
- Introduce different types of price discrimination.
- Discuss the usage of personalized pricing strategies in digital platforms
Week 5: Marketplace vs. Reseller
- Discuss the topic of whether the platform should follow marketplace or reseller models.
- Real-world example: Amazon.
Week 6: Platform Launch Strategies
- Understand and formulate strategies for an effective platform launch.
- Address the chicken-and-egg issue.
Week 7: Recess Week
Week 8: Midterm, Transitioning to Platforms
- From Products to Platforms: Explore the process of transitioning from traditional product-based models to platform-based models.
Week 9: Platform Design Challenges: Leakage
- Delve into challenges related to platform design, with a focus on minimizing leakage.
Week 10: Design Considerations: Ratings and Reviews
- Explore the significance of ratings and reviews in platform design considerations.
Week 11: Advanced Design: Steering
- Investigate advanced strategies for influencing and guiding user behavior on platforms.
- Explore how to steer users when designing a platform.
Week 12: Advanced Design: The usage of AI
- Explore the potential applications of AI technologies in platform operations.
- Examine the challenges associated with these applications and review relevant policies.
Week 13: Presentations
- Present group projects applying knowledge gained throughout the module to design a new platform.
Instructor
Su Mengyang