handbook-tb

Jinyan LiUnlike the relationship between suppliers and consumers inthe traditional economy, the relationship is no longer one of a passive,discrete nature, but rather symbiotic and continuous, and createsreal economic value. Such a relationship may be cultivated through thesupply of a bundle of hardware, a stream of services, and new productsor enhancements. An example of this is Apple, who has bundled thesale of hardware (for example, the iPhone) and software or services(for example, the App Store). These symbiotic relationships can also bethe product of participative networked platforms, such as Wikipediaand YouTube. These platforms allow users to generate user-createdcontent, such as product reviews, creative or how-to videos, and socialmedia sharing, which add value by attracting an audience and provokinginteractions between users and businesses. Frequent updating ofcontent increases a website’s visibility in search results, which drivesthe value of advertisement.Consumers play a more important role in multisided businessmodels or platforms, which are the modern versions of the ancientvillage market and matchmakers. 63 Prominent platforms includeAlibaba, Amazon, eBay, Facebook and Google, each of which carriesa global reputation and is virtually a mini-kingdom on its own.This business model is based on a market in which “multiple distinctgroups of persons interact through an intermediary or platform, andthe decisions of each group of persons affects the outcome for the othergroups of persons through a positive or negative externality.” 64 “In amultisided business model, the prices charged to the members of eachgroup reflect the effects of these externalities. If the activities of oneside create a positive externality for another side (for example moreclicks by users on links sponsored by advertisers), then the prices tothat other side can be increased.” 6563Andrei Hagiu, “Multi-Sided Platforms: From Microfoundations ToDesign And Expansion Strategies,” (2006), available at www.hbs.edu/faculty/Publication%20Files/07-094.pdf;and Andrei Hagiu and Julian Wright,“Multisided Platforms,” (2011), available at http://faculty.chicagobooth.edu/workshops/marketing/past/pdf/MultiSidedPlatformsHagiu.pdf.64OECD, Action 1 — 2014 Deliverable, supra note 3, at 13.65Ibid., at 92.428