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[G1]-PR8-Governance Policies to Increase Value and Enhance Growth…
[G1]-PR8-Governance
Policies to Increase Value and Enhance Growth
Market failure
externalities
when spillover costs or benefits accrue to anyone not involved in a given interaction
negative externality
ex: your friend provides your private contact information to a gaming company in exchange for a few digital points.
positive externality
ex: Netflix analyzes the movie-watching behavior of someone whose tastes match yours and uses this data to give you a more accurate movie recommendation.
problems from a business design stnadpoint
monopoly power
one supplier in an ecosystem becomes too powerful because of its control of the supply of a widely sought good, and uses this power to demand higher prices or special favors.
ex: game-maker Zynga
information asymmetry
one party to an interaction knows facts that other parties don't and uses that knowledge for personal advantage
ex: the seller spell Allsopp in to Allsop, missing the huge profit
ex: Seller don't tell buyer that the problem of counterfeit goods. Like Gucci handbags with broken stitching.
risk
The possibility that something unexpected and essentially unpredictable may go wrong, turning a good interaction into a bad one.
all markets have risk, we should develop tools and systems that serve to mitigate the effects of risk
Principles of smart self-governance
Good governance menas looking after the health of one's ecosystem partners
applied to
platfrom companies themself
platform partners and parrticipants
frist big principle
internal transparency
aviod dysfunction
a trendency for divisions of departments to become "Silod" , to develop unique
perspective
language
diffuclt for
members in different work teams
tool to set
have the same vocabulary
outsiders-users & developers
to work effectively with
systems
processes
tools
to give all their business divisions a clear view to across the entire platform
promotes consistency
helps other s develop / use key resources
facilitates growth to scale
Example
succeed
Amazon
Yegge Rant
learn to communicate with one another using "
service interfaces
"
data communication tools specifically designed
3 more items...
failed
Sony
never develop the vision to offer a platform
embraced separate product lines and focused on individual systems
second big principle
participation
give external partners and stakeholders a voice in internal process equal to that of internal stakeholers
Just and fair governance can create wealth
treat people fairly
more likely to share their ideas
more opportunity to mix /match/ remake them into new innovations
lead participants in a market to allocate their resources more wisely and productively
not always create wealth or can never be created without it
in the long run ,may create more wealth
the governance mechanism must therefore be
self-healing
promote evolution
design for sself-design
encourages platform members to
collaborate freely
experiment fearlessy
update the rules as necessary
flexible enough to reponsed to
fast-moving parts
slow-moving parts
Good governance matters
goals
create wealth
fairly distributed among all those who added value
rules
Don't use your power to change the rules in your favor
Don't take more than a fair share of the wealth
Always create value for the consumers you serve
difficulty
one-sided-platform
can't satisfied both consumers and itself
place the consumers interest ahead of its
multisided platform
involve numerous interest
difficult to ensure that various participants create value for another
conflicts will emerge
Tools of governance
Laws
drafted by the platform’s designers
to moderate behavior at both the user and the ecosystem level
transparent
encourage members to share
Norms
natural role progression
Action
Reward
Trigger
Investment
Architecture
Programing code
Self-improve
Decentralized
Blockchain
Bitcoin
Markets
Mechanism design
Incentives
Govermance
Minimizing risk
Maximizing value
Healthy ecosystem