The bachelor thesis “Drivers of Network Effect on Digital Platforms” was recently finished under the supervision of ESTT members. Here is the abstract:
Digital platforms are taking the world by storm. They scale at an unprecedented pace and some appear never to reach a plateau. Unlike traditional firms, platforms do not take ownership of the goods or services exchanged but merely facilitate transactions. Besides that, there is another key reason for their success: platforms become more valuable the larger they get. This is referred to as the network effect and it can be a source of great competitive advantage. However, it remains largely vague what drives network effects in a platform context. Research has only taken off in recent years with the rise of digital platforms and literature on the topic is still both fragmented and incomplete. This literature analysis is a review of what has been studied so far in research streams as diverse as information systems, strategic management and marketing. The result is a collection of ten drivers that contribute to a better understanding of why platforms thrive. In addition, concise propositions highlighting cause-effect relationships act as guideposts for further research.