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G4_[PR]-Ch8:Governance (Architecture (Becomes better (Predicting borrower…
G4_[PR]-Ch8:Governance
Market failure
Information asymmetry
Risk
monopolize
Externality
Architecture
Becomes better
Predicting borrower behavior
Participation risk declines
Attracting more architecture
To prevent and correct market failures
Ebay, New York Stock Exchange Offers
Online Banking Platforms
Peer-to-peer lending businesses
Bitcoin digital currency
so-called blockchain protocol
makes decentralized goverance possible
Programming Code
Nakamoto's invention
platform with open architecture and a goverance model but no central authority
Markets
SAP
Customer Relationship Management (CRM)
Social currency
Istock photo, Stock Overflow
Same mistake as credit card companies
Airbnb, Uber
Use of mechanism design and various incentines
Risk pooling and insurance
To reduce risk
Laws
many laws created and enforced by nation-states laws
in the traditional sense of term apply to platform businesses andbtheir participants
the application of such laws can be tricky
The law of a platform are its explicit rules
Platform laws should be and usually are transparent
Norms
one of the greatest assets
any platform indeed any business can have isba dedicated community
Vibrant communities are nurtured by skilled platform managers
Principle of smart self-governance for platform
1.Transparency
promote consistency
facilitate growth to scale
help others develop ans d use key resource
2.Participation
give external partners and stakeholder a voice in internal decision
fairness
more likely to share their ideas
more opportunity to mix, match, and remake
allocate resource wisely and productively
coffee pod design expired
Keurig 2.0
scanning divce
prevented the use of pods
consumers were furious
violated three fundamental rules
Don't use your power to change the rules in your favor
Don't take more than fair share of wealth
Always create value for the consumers you serve
Platforms as states
good governance
create wealth
valure creating
grow faster outside the firm than inside
regulators
unofficial, unelected
