Abstract
Platforms employ various levers to enable user membership and participation among the various participant sides, in order to generate and grow positive network externalities that are in turn, beneficial for their performance. However, the use of the same platform levers also generate political externalities, since platform users are also state constituent(s) simultaneously. We explain the origin of these political externalities, as a result of platform actions, and analyze their impact on states, and users. We further investigate how these political externalities impact platform performance - first, due to changes in their non-market environment and second, due to changes in user membership and participation. We draw implications for platform strategy and policy.
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