Failure to Launch: Critical Mass in Platform Businesses

  title={Failure to Launch: Critical Mass in Platform Businesses},
  author={David S. Evans and Richard. Schmalensee},
  journal={Review of Network Economics},
Platform businesses add value by facilitating interactions between customers who are attracted in part by network externalities. Two-sided platform businesses with low costs of reversing participation status have become more important with the rise of the Internet. This essay is concerned with new businesses of this sort and the initial critical mass hurdle that they generally seem to face. In a very general model, we show how this hurdle depends on the nature of network effects, the dynamics… 
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