Tipping: Should regulators intervene before or after? A policy dilemma

Oxera, Ambroise Descamps, Helen Jenkins and Lirio Barros, April 2021, Agenda

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In digital markets, platforms often reach a tipping point. When network effects are sufficiently strong, users are drawn towards the network with the highest number of other users, making it more attractive, until the market eventually tips in its favour. While there are benefits to market tipping, concerns regarding abuse of dominance may also arise, which, as discussed in this article, can present a dilemma for policymakers.

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