Facebook Platform is a prominent example of an internet-based
service for which third-party developers can offer small add-on
programs, which are often referred to as applications. The
distribution of success of applications is highly skewed. This
market structure with few blockbuster applications and a long-tail
of unpopular ones is common in the media, entertainment and
software industries. Philip Mayrhofer compiled individual-level
survey data as well as an original panel data set of Facebook
applications in order to examine the market for Facebook
applications in detail. Specifically he identifies
interdependencies such as bandwagon effects between users and
spillovers between applications and analyzes whether they
contribute to the concentrated market structure.
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