Mechanisms of intermediary platforms

Abstract

In the current digital age of the Internet, with ever-growing networks and data-driven business models, digital platforms and especially marketplaces are becoming increasingly important. These platforms focus primarily on digital businesses by offering services that bring together consumers and producers. Due to added value created for consumers, the profit-driven operators of these platforms (Matchmakers) are extremely successful and have come to dominate their respective markets.The aim of this article is to understand how Matchmakers and coordination networks gain market dominance. The following sections will take a closer look at network and coordination effects as well as intermediary platform mechanisms and entailing disadvantages for users. Considering strategic and business challenges, we suggest a possible solution and strategy to avoid dependencies on individual players in the digital economy. We present a cooperative approach towards a fair and open Economy of Things (EoT) based on decentralized technologies.