Platforms are the critical players driving the digital economy. My thesis focuses on the platform economy, especially the competitive advantage of platforms. On the one hand, what factors affect the competitive advantage of platforms? How does the platform form the competitive advantage? These questions are related to platform strategy. On the other hand, does the competitive advantage of platforms harm social welfare? This question is related to regulatory issues. The first chapter of my dissertation studies how different aspects of user effects drive value in two-sided markets. We first develop a model of inter-temporal network effects and within-period network effects of users to estimate different aspects of user effects. We then propose a model to estimate the user lifetime value in two-sided markets and examine the effectiveness of the user growth strategy. Finally, we discuss platform heterogeneity and corresponding platform strategies. Using Groupon data, we empirically estimate different aspects of user effects and examine how they vary. We show that the strength of the inter-temporal same-side network effect affects user stickiness, further influencing the persistence of the within-period cross-side network effect. Strong within-period cross-side network effects alone cannot sustain value creation. Our findings remind managers not to overemphasize user growth when the inter-temporal network effects are weak and should instead focus on platform design that increases user stickiness. The second chapter of my dissertation examines the impact of a potential policy of opening a platform's big data to banks on FinTech lending. We show that the policy promotes competition in FinTech lending and the loan price decreases. However, its impact on financial inclusion is unclear. We discuss how the efficiency of the banking system and the value of big data affect the policy outcome. We also consider the equilibrium of a data market where the platform can sell big data to banks. We show that FinTech can best promote financial inclusion in this case, but the loan price is the same as when the platform monopolizes big data. Since financial inclusion is important for entrepreneurship and innovation, the regulator should carefully examine the context in their countries before making a policy choice. The third chapter of my dissertation studies the impact of cross-market acquisitions of giant platforms on start-ups' entry into emerging markets. Our model shows that the acquisition reduces the post-acquisition entry but may increase the pre-acquisition entry. The net effect of the acquisition on the entry is positive when the pre-acquisition gain is greater than the post-acquisition loss. We then discuss three cases in which a giant platform strategically increases its market position in the acquisition. The net effect of the acquisition on start-ups' entry varies in different cases. Our findings indicate that regulators should analyze the specific situation of each acquisition before making a decision to approve an acquisition.