Platform Competition as Network Contestability

Recent research in industrial organisation has investigated the essential place that middlemen have in the networks that make up our global economy. In this paper we attempt to understand how such middlemen compete with each other through a game theoretic analysis using novel techniques from decision-making under ambiguity. We model a purposely abstract and reduced model of one middleman who pro- vides a two-sided platform, mediating surplus-creating interactions between two users. The middleman evaluates uncertain outcomes under positional ambiguity, taking into account the possibility of the emergence of an alternative middleman offering intermediary services to the two users. Surprisingly, we find many situations in which the middleman will purposely extract maximal gains from her position. Only if there is relatively low probability of devastating loss of business under competition, the middleman will adopt a more competitive attitude and extract less from her position.Comment: 23 pages, 3 figure

Comparison Sites

Web search technologies are fundamental tools to easily navigate through the huge amount of information available in the Internet. One particular type of search technologies are the so- called shopbots, or comparison sites. The emergence of Internet shopbots and their implications for price competition and market efficiency are the focus of this chapter. We develop a simple model where a price comparison site tries to attract (possibly vertically and horizontally differentiated) online retailers on the one hand, and consumers on the other hand. The analysis of the model reveals that differentiation among the products of the retailers as well as their ability to price discriminate between on- and off-comparison-site consumers play a critical role. When products are homogeneous, if online retailers cannot charge different on- and off-the-comparison- site prices, then the comparison site has incentives to charge fees so high that some firms are excluded, which generates price dispersion and an inefficient outcome. By contrast, when on- and off-comparison-site prices can be different, the comparison site attracts all the players to the platform and the allocation is efficient. A similar result obtains when products are horizontally differentiated. In that case, the comparison site becomes an aggregator of product information and no matter whether firms can price discriminate or not, the comparison site attracts all the players to the platform and an efficient outcome ensues. We argue that the lack of vertical product differentiation may also be critical for this efficiency result. In fact, we show that when quality differences are large, the comparison site may find it profitable to charge fees such that low quality producers are excluded, thereby inducing an inefficient outcome.

The economics and business models of prescription in the Internet

L'économie de l'Internet a contribué à une ouverture du jeu concurrentiel en dissociant les fonctions physique et informationnelle des activités de distribution. Plus précisément, elle a ouvert la voie à de nouvelles structures de marché en mettant en avant une fonction de prescription clairement distincte des fonctions d'offre d'une part, des fonctions logistiques et de mise à disposition des biens d'autre part. Nous nous attachons ici à montrer que l'analyse des fonctions et modalités de prescription permet de mieux comprendre les modèles d'affaires et les structures concurrentielles à l'œuvre dans l'économie de l'Internet organisées autour de l'articulationde trois marchés : biens primaires, référencement, prescription. Cette modélisation de marchés à prescription contribue à enrichir la compréhension des chaînes de valeur et des relations d'affaires repérables dans l'Internet.prescription;internet

Efficient systems for the securities transaction industry : a framework for the European Union

This paper provides a framework for the securities transaction industry in the EU to understand the functions performed, the institutions involved and the parameters concerned that shape market and ownership structure. Of particular interest are microeconomic incentives of the industry players that can be in contradiction to social welfare. We evaluate the three functions and the strategic parameters - the boundary decision, the communication standard employed and the governance implemented - along the lines of three efficiency concepts. By structuring the main factors that influence these concepts and by describing the underlying trade-offs among them, we provide insight into a highly complex industry. Applying our framework, the paper describes and analyzes three consistent systems for the securities transaction industry. We point out that one of the systems, denoted as 'contestable monopolies', demonstrates a superior overall efficiency while it might be the most sensitive in terms of configuration accuracy and thus difficult to achieve and sustain

Business models as systemic instruments for the evolution of traditional districts?

This paper aims to explore the potential role of Innovation Intermediaries in the evolution of a traditional cluster toward a service-oriented perspective. In particular, we will highlight the generative function of business models, here as market devices, in stimulating the co- evolution of Intermediary and target firms’ strategies.Business Models, Innovation Intermediaries, Entrepreneurship, Manufacturing, Systemic Instruments

Lobbying in the European Union: From Sui Generis to a Comparative Perspective.

This article reviews the literature on lobbying in the European Union. After initial surveys of the landscape of non-governmental actor participation, theoretical investigations have focused on the modes of network governance and later on the phenomenon of Europeanization. Yet studies have increasingly moved away from considering EU lobbying as a sui generis phenomenon. Normalizing the study of interest group participation in the EU and understanding the opportunities and constraints that are characteristic for it has led more and more scholars to adopt a comparative perspective. The most interesting parallels exist between Washington and Brussels, but unfortunately there have been very few attempts to explore the connection between the American literature on lobbying and EU studies. This article makes a first step towards such a comparison and points to concepts common in comparative politics that could provide considerable insight into the study of EU lobbying.European Union;institutional constraints;interests groups;lobbying;opportunity structure;United States;

Blockchain-based innovation in post-COVID-19 trade finance

While trade finance has been recognized as a key enabler in international trade, there is a persistent gap between supply and demand. This gap threatens to widen after the shocks suffered during the COVID-19 pandemic, which increased risks percep- tion and decreased credit appetite. As a parallel phenomenon, distributed ledger technology (DLT), aka blockchain, has given birth to the decentralised finance (DeFi) paradigm, promising to revolutionize banking and the whole financial sector. This paper enquires whether a DeFi-based business model could address the trade finance gap problematic under the context and challenges created by the COVID-19 pandemic, particularly in relation to SMEs located in developing and least developed countries. To this end, it designs and presents a DeFi trade finance business model, showing how it could address the reasons behind the trade finance gap, while developing at the same time a broader meaning of the DeFi concept itselfPostprint (published version

Quoted spreads and trade imbalance dynamics in the European treasury bond market

Using high-frequency transaction data for the three largest European markets (France, Germany and Italy), this paper documents the existence of an asymmetric relationship between market liquidity and trading imbalances: when quoted spreads rise (fall) and liquidity falls (increases) buy (sell) rders tend to prevail. Risk-averse market-makers, with inventory-depletion risk being their main concern, tend to quote wider narrower) spreads when they think bond appreciation is more (less) likely to occur. It is also found that the probability of being in a specific regime is related to observable bond market characteristics, tock market volatility, macroeconomic releases and liquidity management operations of the monetary authorities

Business models for the Web: an analysis of top successful web sites

To investigate successful web business models, an original multidimensional framework is defined and applied to a large number of web sites. The framework‚ named BM*Web‚ combines issues already present in existing schema describing business models, with innovative aspects that have not previously been taken into account in those combinations or which are now viewed in a new light. Results of the application of BM*Web to the 500 top list of Alexa (at a speficic time) highlight an articulated picture where more than one success profile exists and not all of them include a web community, although a strong relationship exists between community and success under some conditions. The identification of features that characterize the most successful business models for the Web could be used to define guidelines for company management, once the appropriate profile for a company has been recognised.