Open transaction networks: rethinking platform competition

Today, a few major platforms play a central role in how we buy, sell, access services and interact online. But what happens when the infrastructure that enables these transactions is shared across platforms?

This question is at the heart of a new research project led by Paul Belleflamme (LIDAM/CORE), together with Sumit Shrivastav (LIDAM/CORE), Kishen Shastry (University of Cambridge), Daniele Rinaldo (University of Exeter) and Jean-Louis Arcand (Global Development Network).

Their working paper, “Open Transaction Networks and Platform Competition”, examines networks based on common digital protocols rather than a single proprietary intermediary.

The analysis shows, among other things, that competing platforms may have an incentive to embrace interoperability. At the same time, opening networks does not necessarily distribute benefits equally: it can broaden access to markets while also allowing platforms to increase certain access fees.

The Open Network for Digital Commerce (ONDC) in India is one of the key real-world examples motivating the research.

The project is part of the Global Development Network’s Economics of Open Transaction Networks programme, supported by the Gates Foundation.