For example, consumers are drawn to platforms offering an attractive array of goods and services. Sellers in turn flock to those platforms in large numbers where they can find a broad base of possible purchasers of their products.
The economist Jean Tirole has therefore compared digital platforms to large cities: Even though most of their residents don’t know each other, they all benefit from the fact that cities are home to many firms and offer a rich cultural life.12 Network effects and returns to scale in the digital sphere enable individual firms to prevail.