Marketing Seminar（2018-07）

Topic: Platform Ecosystems: How Developers Invert the Firm

Speaker: Marshall Van Alstyne, Professor of Boston University’s Questrom School of Business

Time: Wednesday, 30 May, 13:30-15:00

Location: Room 217, Guanghua Building 2

Abstract:

This talk will argue that giant firms like Apple, Alibaba, Facebook, Google, and Tencent are inevitable.  Monopolistic competition in the Internet era resembles the monopolistic competition of the industrial era but for the opposite reason.  At the turn of the previous century, supply economies of scale allowed firms producing steel, oil, autos, and rail transport to drive out competition. By increasing volume, they could lower prices, which increased their volume, and lowered prices.  In the current century, firms providing operating systems, search, social networks, and matching markets are also driving out competition but using the other side of the profit equation. Now firms use demand economies of scale, also called "network effects." By increasing volume, firms can increase value, which increases volume, which increases value.  Network effects, however, scale more readily outside the firm than inside the firm. This inverts the production function of the firm, moving value creation from inside to outside. This talk will develop a formal economic model of firm "inversion" in the specific case of code spillovers. When shared resource pools become large enough, firms can grow faster by orchestrating value produced by others rather than producing value themselves.

Introduction:

Marshall Van Alstyne (@InfoEcon) is a coauthor of the international bestseller Platform Revolution. He is a leading expert on network business models and is Everett Lord Distinguished Scholar at Boston University’s Questrom School of Business and a digital fellow at the MIT Initiative on the Digital Economy.  His research has received half a dozen academic awards and appeared in journals such as Science, Nature, Strategic Management Journal, Management Science and Harvard Business Review. He has been a board level advisor to multiple firms. He studied computer science at Yale and information technology at MIT.

Your participation is warmly welcomed!