Essays in platform economics

In this thesis we present three papers which investigate informative content generated by consumers, aiming to improve the usefulness for matching high quality products at lower prices. Following a general perspective, we explore platform product listing, searchable through a decision making mechanism. In a more specialized perspective, we take into account a dropping price modality service, differentiating the consumer benefit in the case of high or low quality product matching. Chapter 1 Product quality on platform markets. Abstract Many studies have questioned the meaning of \u201cproduct quality\u201d, hanging between a characteristic interpretation of a product for improving consumer satisfaction, and scientific approach to measure its benefits. Starting from the historical quality setting as mirror image of the price, we investigate the adoption of new signals, developed over the years to adjust the original relationship. Recently, bootstrapping by emperor of e-commerce platforms, the rating system has emerged as a reference contribute for product quality informativeness. We study this tendency, to show its failure in the presence of low price market and new brands. For this purpose, we collect User Generated Contents from a well-known online retailing platform. We capture and distill meaningful features in order to adjust the rating assigned by reviewers, and propose a novel quality formula able to increase the accuracy of the information provided to the consumer. We suggest that our formula better captures product quality, and, when adopted by a platform for sorting the products, it increases the products variety and, consequently the satisfaction of the consumer. Our proposal suggests a way to facilitate the consumer search (as we will show in the second chapter). Moreover, it can be used as a measure of market efficiency in the case of voluntary opacity of the platform in exposing product quality signals.Chapter 2 Optimizing Product Quality in Online Search Abstract Exploiting an original definition of product quality, based on the information we can get from the User Generated Content, and driven by a statistical learning algorithm, we propose a new ordering mechanism for product search on platforms. This product quality formula is imported in a decision making mechanism which adopts an optimal Stopping Rule, in order to set the optimal time to terminate the search process and choose a good to purchase. We show how the consumer can benefit from the implementation of such a mechanism, demonstrating an improvement in terms of consumer utility at different levels of price, with respect to other sorting traditionally adopted by platforms. We propose a utility function fitted to a Gumbel distribution, and we demonstrate a stochastic dominance of our model. Experimental evidences on the camera market category put in relevance the efficiency of our quality index for ranking the effective quality compared to the more traditional rating system. This is particularly true for the low-price accessory market segment of products, in which we show higher utility dominance and slightly higher elasticity of demand.Chapter 3 Price Matching and Platform Pricing Abstract In this study we investigate the effects of Price Matching Guarantees (PMG) commercial policies on U.S. online consumer electronics daily prices. By applying a Diff-in-Diff identification strategy we find evidence in favor of price reductions occurring after the PMG policy is repealed. We further investigate if such effect is heterogeneous according to products characteristics, by exploiting User Generated Contents (products popularity and quality) and online search visibility measures (Google Search Rank). Estimates suggest that for high quality (visibility) products PMG policies harms competition by keeping prices high, while for low quality (visibility) products, prices decrease during the policy validity period

Platform Economics in Vertically-Related Structures

A l'última dècada, l'auge i l'expansió de l'economia de plataformes ha representat la nova revolució econòmica. Recolzada per la digitalització, aquesta nova forma d'organització de l'economia ha canviat l'arquitectura general de la indústria i ha reformat tot el procés de creació de valor, que ha passat d'estructures de cadena vertical a ecosistemes més horitzontals. Empreses com Amazon, Facebook, Google i Microsoft són un clar exemple d'aquest canvi disruptiu. Aquesta tesi es composa de tres assaigs independents relacionats amb la nova economia de plataformes. Al capítol 1, s'analitza l'efecte combinat de la previsió del consumidor i la competència entre aeroports sobre els beneficis de la plataforma, mitjançant l'anàlisi de les indústries aeroportuàries. Curiosament, s’observa que l'estratègia òptima d'un aeroport monopolista depèn en última instància del grau de previsió del consumidor i és insensible als canvis de l'entorn competitiu. No obstant això, la correlació entre els beneficis aeroportuaris i la miopia del consumidor és positiva quan es consideren aeroports monopolis i feblement negativa quan es té en compte la competència aeroportuària. Al capítol 2 s’explora la distribució autònoma i delegada per part dels autors en la indústria del llibre electrònic, tenint en compte el cas concret d'Amazon. El principal resultat suggereix que l'autopublicació comporta uns preus més elevats dels llibres electrònics per als consumidors en determinades circumstàncies. Finalment, al capítol 3 abordem el tema de la venda d'informació dels consumidors, caracteritzant l'estratègia òptima d'un propietari de dades que decideix si vendre les seves dades o utilitzar-les per competir en el mercat. Es conclou que el propietari de les dades no té una estratègia dominant.En la última década, el auge y expansión de la economía de plataformas ha representado la nueva revolución económica. Con la ayuda de la digitalización, esta nueva forma de organizar la economía ha cambiado la arquitectura general de la industria y ha reformado todo el proceso de creación de valor, que ha pasado de estructuras de cadena vertical a ecosistemas más horizontales. Empresas como Amazon, Facebook, Google y Microsoft son un claro ejemplo de este cambio disruptivo. Esta tesis se compone de tres ensayos independientes, relacionados con la nueva economía de plataformas. En el capítulo 1, se analiza el efecto combinado de la previsión del consumidor y la competencia entre aeropuertos sobre los beneficios de la plataforma, mediante el análisis de las industrias aeroportuarias. Curiosamente, se observa que la estrategia óptima de un aeropuerto monopolista depende en última instancia del grado de previsión del consumidor y es insensible a los cambios en el entorno competitivo. Sin embargo, la correlación entre los beneficios de los aeropuertos y la miopía de los consumidores es positiva cuando se consideran aeropuertos monopolistas y débilmente negativa cuando se considera la competencia aeroportuaria. En el capítulo 2, se explora la distribución propia y delegada por parte de los autores en la industria del libro electrónico, tomando en consideración el caso específico de Amazon. El resultado principal sugiere que la autoedición conlleva precios más altos de los libros electrónicos para los consumidores en ciertas circunstancias. Finalmente, en el capítulo 3 se aborda el tema de la venta de información de los consumidores, caracterizando la estrategia óptima de un propietario de datos que decide si vender sus datos o usarlos para competir en el mercado. Se concluye que el propietario de los datos no tiene una estrategia dominante.In the last decade, the rise and expansion of the platform economy has represented the new economic revolution. Helped by the digitization, this new form of organizing the economy has changed the overall Industry Architecture and reformed the whole value-creation process, which has passed from vertical-chain structures to more horizontal ecosystems. Companies such as Amazon, Facebook, Google and Microsoft are a clear example of this disruptive change. This thesis is composed of three independent essays related to new platform economy. In chapter 1, we analyze the combined effect of consumer foresight and competition on platform profits, by analyzing the airport industries. Interestingly, we find that the optimal strategy of a monopoly airport ultimately depends on the degree of consumer foresight and it is insensitive to changes in the competitive environment. Nevertheless, the correlation between airport profits and consumer myopia is positive when considering a monopoly airports and weakly negative when considering airport competition. In chapter 2, we analyze the self- and delegated distribution in the e-book industry, by taking into consideration the specific case of Amazon. Our main result suggests that self-publishing results in higher e-book prices for consumers under certain circumstances. Finally, in chapter 3 we address the topic of the sale of consumer information, by characterizing the optimal strategy of a data owner who has to decide whether to sell his data or using them to compete in the market. We find that the data owner does not have a dominant strategy

Book review: Advanced introduction to platform economics by Robin Mansell and W. Edward Steinmueller

In Advanced Introduction to Platform Economics, Robin Mansell and W. Edward Steinmueller offer a new roadmap to the economics and regulation of digital platforms, arguing that decisions about regulating platforms should be driven by careful economic analysis. This concise book provides a helpful guide to those coming with fresh eyes to studying platforms and platform regulation, finds Sara Bannerman. Advanced Introduction to Platform Economics. Robin Mansell and W. Edward Steinmueller. Edward Elgar Publishing. 2020

Book review: Advanced introduction to platform economics by Robin Mansell and W. Edward Steinmueller

In Advanced Introduction to Platform Economics, Robin Mansell and W. Edward Steinmueller offer a new roadmap to the economics and regulation of digital platforms, arguing that decisions about regulating platforms should be driven by careful economic analysis. This concise book provides a helpful guide to those coming with fresh eyes to studying platforms and platform regulation, finds Sara Bannerman. Advanced Introduction to Platform Economics. Robin Mansell and W. Edward Steinmueller. Edward Elgar Publishing. 2020

Piggybackers and freeloaders: platform economics and indirect liability for copyright infringement

Many, if not most, copyright cases of alleged indirect liability for copyright infringement arise in platform markets: One of the litigating parties is a market intermediary that connects members of different distinct groups. Indirect liability for copyright infringement is still controversial and frequently litigated. This paper develops an analytical framework that is applicable to many of the debated cases. The presented framework offers strong justifications for the imposition of indirect liability for copyright infringement in platform markets and offers tools to establish certain elements of indirect liability for copyright infringement

Book review: Advanced introduction to platform economics by Robin Mansell and W. Edward Steinmueller

In Advanced Introduction to Platform Economics, Robin Mansell and W. Edward Steinmueller offer a new roadmap to the economics and regulation of digital platforms, arguing that decisions about regulating platforms should be driven by careful economic analysis. This concise book provides a helpful guide to those coming with fresh eyes to studying platforms and platform regulation, finds Sara Bannerman

Dealing with digital: the economic organisation of streamed music

© The Author(s) 2020. The intervention of digital service providers (DSPs) or platforms, such as Spotify Apple Music and Tidal, that supply streamed music has fundamentally altered the operation of copyright management organisations (CMOs) and the way song-writers and recording artists are paid. Platform economics has emerged from the economic analysis of two- and multi-sided markets, offering new insights into the way business is conducted in the digital sphere and is applied here to music streaming services. The business model for music streaming differs from previous arrangements by which the royalty paid to song-writers and performers was a percentage of sales. In the case of streamed music, payment is based on revenues from both subscriptions and ad-based free services. The DSP agrees a rate per stream with the various rights holders that varies according to the deal made with each of the major record labels, with CMOs, with representatives of independent labels and with unsigned artists and song-writers with consequences for artists’ earnings. The article discusses these various strands with a view to understanding royalty payments for streamed music in terms of platform economics, offering some data and information from the Norwegian music industry to give empirical support to the analysis

Book review of Advanced introduction to platform economics

English version: Silva, E. C. (2021). Book review of Advanced introduction to platform economics. Comunicação e Sociedade, 39, 311-315. https://doi.org/10.17231/comsoc.39(2021).3175[Excerto] O livro Advanced Introduction to Platform Economics é uma proveitosa contribuição para a compreensão das plataformas digitais, um fenómeno marcante nas sociedades contemporâneas. Com uma proposta condensada em termos de porte, mas abrangente no seu alcance e aprofundamento dos temas, o livro concorre para um debate recorrente sobre a necessária regulação destas plataformas.[Excerpt] The book Advanced Introduction to Platform Economics is a useful contribution to the understanding of digital platforms, a remarkable phenomenon in contemporary societies. With a compact proposal in terms of size, but comprehensive in its scope and in the deepening of the topics, the book competes for a recurring debate on the necessary regulation of these platforms.Este trabalho é financiado por fundos nacionais através da FCT – Fundação para a Ciência e a Tecnologia, I.P., no âmbito do projeto UIDB/00736/2020

Value creation in electric vehicle charging networks

Electric vehicles (EV) are gaining a prominent share of the trillion-dollar automotive market. The growth is fueled by falling battery prices, tightening emission standards, government subsidies and increasing competition. The rise of EV’s creates a need for, and also depends on, charging infrastructure on a large scale. Electric vehicle charging networks are services that are used to manage and enable access to charging points. This study aims to understand how these networks can succeed in the tightening competition by examining what factors contribute to the value of an EV charging network for its participants. To reach this goal an explanatory single case study was conducted. The case examined a public EV charging network in Finland. First, earlier research in platform economics and EV charging were used to understand the context and to synthesize a theoretical framework. Next, empirical data was collected primarily with semi-structured interviews. Finally, pattern matching was used to analyze the data. Based on the results, the EV charging industry is still its infancy. EV charging networks mediate transactions between EV drivers and charging point owners (CPO), enabling exchange of information, control of charging points, and payments. Various signals suggest an expansion towards the energy system, as EV charging networks are likely to start aggregating and mediating vehicle-to-grid (V2G) services between EV drivers and energy market agents. The results suggest two focus areas as key factors creating value for participants. Firstly, the main contributor to the success of an EV charging network is the amount of charging points connected to it. This is mainly due to EV drivers’ strong positive cross-side network effects and to CPOs’ strong positive same-side network effects. Secondly, an EV charging network’s boundary resources should be designed to maximize efficiency for both sides. For EV drivers, charging is a mundane task that needs to be as effortless as possible. For CPO’s, offering charging is not a main business, but a relatively small value-added service. This study serves as a starting point for a new research stream, converging EV charging with platform economics research. In addition, the results help researchers in understanding the state of the industry and network operators in making strategic decisions