Skip to main content

Aggregation Theory

  • Ben Thompson presents this for a way to understand high-tech companies
  • A specialized version of what economists call a two-sided market theory
  • Asserts that
    • The quality of the user experience, rather than control over distribution, is what determines the winners in digital markets
    • A lead based on quality is self-reenforcing, because either more suppliers are attracted or the winner, with more customers, gets more feedback on what makes for a better product
  • Aggregators are in this manner different than traditional monopolists, for they "win by building ever better products for consumers"