middlemen writes "The rising popularity of the open-source software movement has prompted many governments around the world to enact policies promoting open-source software systems at the expense of proprietary systems. Oftentimes, these policies seem to stem from a presumption (shared by some economists) that open software platforms are inherently more efficient than their proprietary counterparts. But is that so?
This paper[PDF] at Harvard Business Week provides a simple model of two-sided platforms that clearly shows how this common intuition breaks down in two-sided markets."
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