CONCEPT
Platform Economics
The analytical framework governing <em>multi-sided markets where value is created by participants and captured by intermediaries</em> — now the defining economic structure of the AI-enabled creation ecosystem.
Platform Economics is the body of analytical work — running from Carl Shapiro and Hal Varian's Information Rules through Jean Tirole's Nobel-winning research on two-sided markets to Ben Thompson's aggregation theory — that describes how intermediary entities capture value in markets where production is performed by participants. The framework explains why Amazon, Google, Facebook, Apple, and Spotify are worth more than most of the producers whose work their platforms distribute. It predicts, with considerable precision, how the AI moment will reorganize the software economy around foundation-model providers as the new aggregation layer.
In The You On AI Field Guide
The core insight is that platforms capture disproportionate value because they sit at the coordination point of multi-sided markets. Producers need access to consumers; consumers need help finding producers; the platform solves both problems simultaneously and charges a fee for each transaction it enables. The fee compounds as the platform grows — more producers attract more consumers, which attracts more producers, in a feedback loop that strengthens the platform's position.
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