Internet platform as a new coordination mechanism – rethinking Kornai’s theory

Zsolt Ződi

TL;DR: The presentation argues that internet platforms are new coordination mechanisms in the Kornaian sense, having a special relationship with the "traditional" mechanisms, like bureaucracy or market.

Abstract: Though Kornai's theory of coordination mechanisms is perhaps not the most well-known part of his oeuvre, it plays a key role in "The Socialist System" and Kornai devoted an entire chapter to it. In my presentation, I try to think Kornai's theory further and supplement his main types with a new one, “algorithmic coordination”. I argue that Internet platforms, which Julie Cohen calls "the core organizational logic of the informational economy", and Stark and Pais "distinctive organizational form", can be placed among Kornai's coordination mechanisms. In my presentation, on the one hand, I will highlight the literary background of the coordination mechanism and the platform as a specific coordination mechanism, and on the other hand, I will briefly analyse how this new coordination mechanism affects the functioning of the others - how does it replace, complement, or simulate their operation, and what kind of social, and regulatory consequences these interactions can have.