Week 5

Question 1

Two assumptions in the one-sided market strategy

Answer 1

1. Supply chains move from left to right
   
   1. Some supply chains move in both directions (Consulting)
2. Independence of demand (pedicure example - my joy independent of the joy of others)
   
   1. An exception would be talking on the phone - you have to have compatible devices

Question 2

Network externalities

Answer 2

exist when individuals’ demand is interdependent. That is to say, when an individual’s participation in the market depends on others’ participation.

Question 3

Same-side Network Effects

Answer 3

My willingness to join one side of the market depends on the number and type of participants on the same side of the market.

Question 4

Cross-side Network Effects

Answer 4

The willingness to join one side of the market depends on the number and type of participants in the other side of the market.

Question 5

Two-sided markets and platforms

Answer 5

Question 6

Upstream

Answer 6

Upstream firms deal primarily with the exploration and initial production stages of the oil and gas industry. Many large oil companies are called “integrated” because they combine upstream activities with midstream and downstream operations, which take place after the production phase through to the point of sale.

Question 7

Downstream

Answer 7

Downstream operations are oil and gas operations that take place after the production phase, through to the point of sale. Downstream operations can include refining crude oil and distributing the byproducts, such as gasoline, natural gas liquids, diesel and a variety of other energy sources, down to the retail level. The closer an oil and gas company is to the process of providing consumers with petroleum products, the further downstream the company is said to be.