Platform Economics

Platform economics refers to the business model used by companies that facilitate exchanges between users, such as buyers and sellers, through a digital platform. Instead of directly selling products or services, these platforms create an environment where users can connect and transact, often charging fees or earning revenue from advertisements. Examples include companies like Amazon, Uber, and Airbnb. This model emphasizes the value of network effects, where the platform becomes more valuable as more users join, leading to increased interactions and opportunities for profit, ultimately transforming traditional industries and consumer behaviors.