Question

What are the benefits of platform monopolies? What are the costs?

a.) Benefits include increased efficiency and negative network externalities. Costs include increased competition, a divide between monopolists' goals and society's goals, and privacy concerns.

b.) Benefits include decreased efficiency, positive network externalities, and dynamic growth. Costs include decreased competition, similarities between the good for monopolist and for society, and privacy concerns.

c.) Benefits include increased efficiency, positive network externalities, and dynamic growth. Costs include decreased competition, a divide between what is good for the monopolist and what is good for society, and concern for users' privacy.

d.) Benefits include increased efficiency, positive network externalities, and lack of dynamic growth. Costs include decreased competition, a divide between monopolist's good and society's good, and protection of users' privacy.

Answer 1

c.) Benefits include increased efficiency, positive network externalities, and dynamic growth. Costs include decreased competition, a divide between what is good for the monopolist and what is good for society, and concern for users' privacy.

(Benefits of platform monopolies are that they have high efficiency with positive network externalities, and it leads to dynamic growth. But it also decreases competition, and create gaps between socially efficient quantity and profit maximizig quantity which are its costs.)