Platform economics and antitrust enforcement: A little knowledge is a dangerous thing

Katz, Michael L. “Platform economics and antitrust enforcement: A little knowledge is a dangerous thing." Journal of Economics & Management Strategy 28.1 (2019): 138-152.[PDF]

==abstract==

Although the economics of multisided platforms has developed important insights for antitrust policy, there are critical respects in which the body of academic knowledge falls short of providing useful advice to enforcement agencies and the courts. Indeed, there is a substantial risk that recent scholarship will be misapplied to the detriment of sound antitrust policy, as evidenced by the US Supreme Court’s recent decision in American Express. In this note, I identify several areas in which economics research could potentially make significant contributions to the practical antitrust treatment of platforms.

“Justice Stephen Breyer’s dissent mocks the majority’s economic reasoning, as will most economists, including the creators of the “two-sided markets” theory on which the court relied. The court used academic citations in the worst way possible — to take a pass on reality.”

—Wu (2018b) commenting on the Supreme Court’s American Express opinion.

Two-sided network effects: A theory of information product design

Parker, Geoffrey G., and Marshall W. Van Alstyne. “Two-sided network effects: A theory of information product design." Management science 51.10 (2005): 1494-1504. [pdf]

original Abstract

How can firms profitably give away free products? This paper provides a novel answer and articulates trade-offs in a space of information product design. We introduce a formal model of two-sided network externalities based in textbook economics—a mix of Katz and Shapiro network effects, price discrimination, and product differentiation. Externality-based complements, however, exploit a different mechanism than either tying or lock-in even as they help to explain many recent strategies such as those of firms selling operating systems, Internet browsers, games, music, and video.

The model presented here argues for three simple but useful results. First, even in the absence of competition, a firm can rationally invest in a product it intends to give away into perpetuity. Second, we identify distinct markets for content providers and end consumers and show that either can be a candidate for a free good. Third, product coupling across markets can increase consumer welfare even as it increases firm profits.

The model also generates testable hypotheses on the size and direction of network effects while offering insights to regulators seeking to apply antitrust law to network markets.

Incentives and prosocial behavior

Bénabou, Roland, and Jean Tirole. “Incentives and prosocial behavior." American economic review 96.5 (2006): 1652-1678. [PDF] princeton.edu

====

What is, therefore, the broader set of motives that shape people’s social conduct, and how do these motives interact with each other and the economic environment?

Business Models in Two-sided Markets: an Assessment of Strategies for App Platforms.

Kouris, Iana, and Rob Kleer. “Business Models in Two-sided Markets: an Assessment of Strategies for App Platforms." ICMB. 2012. [PDF][****]

==YNY==

文獻回顧可參考

Collective Commitment

Collective Commitment

Date:	2016-07
By:	Christian Roessler Sandro Shelegia Bruno Strulovici
URL:	http://d.repec.org/n?u=RePEc:bge:wpaper:933&r=net
	We consider collective decisions made by agents whose preferences and power depend on past events and decisions. Faced with an inecient equilibrium and an opportunity to commit to a policy, can the agents reach an agreement on such a policy? We provide a consistency condition linking power structures in the dynamic setting and at the commitment stage. When the condition holds, commitment has no value: any agreement that may be reached at the outset coincides with the equilibrium without commitment. When the condition fails, as in the case of time-inconsistent preferences, commitment can improve outcomes. We discuss several applications.
JEL:	D70 H41 C70

Monetization Strategies for Internet Companies

Monetization Strategies for Internet Companies

Date:	2016
By:	Voigt, Sebastian
URL:	http://d.repec.org/n?u=RePEc:dar:wpaper:83314&r=net
	Many Internet service companies such as providers of two-sided markets, social networks, or online games rely on the social interaction between their user base and thus capitalize from positive network effects. For such companies, a common strategy is to offer (basic) services for free (and thereby abolish entry barrier of a one-off or recurring price) and to charge their users for premium services. Companies such as eBay, PayPal, LinkedIn, or Skype added paid services to their originally free business models, either via subscriptions, PAYG, or direct sales of virtual items. Their strategy how to make money and whom to bill however differs widely. In the Internet business, ‘monetization’ has become a frequently used buzzword for all aspects of a company’s revenue strategy which includes the decision who should be billed (e.g., for a two-sided market: seller vs. buyer vs. advertisers only), with which price model (e.g., mandatory subscription vs. optional subscriptions vs. selling virtual currency or items) and price level (e.g., differentiated between user groups), and – in case of a freemium strategy – how a new (free) user can be converted most efficiently into a paying and remunerative customer (e.g., via effective CRM measures). The overarching objective of all monetization measures is to maximize the company’s revenue and/or profit. The field of monetization offers a wide field of research opportunities. Four of these are covered in this dissertation: The Name-your-own-price model, users’ spending behavior in virtual communities, the monetization of network effects in social networks, and the legal boundaries of social network usage. As a result, this dissertation solves a series of questions currently being worked on by practitioners and uses a wide range of methods from various disciplines such as economic, psychological, and game theory.

Common Belief Revisited

Common Belief Revisited

Date:	2016-08
By:	Romeo Matthew Balanquit (School of Economics, University of the Philippines Diliman)
URL:	http://d.repec.org/n?u=RePEc:phs:dpaper:201608&r=net
	This study presents how selection of equilibrium in a game with many equilibria can be made possible when the common knowledge assumption (CKA) is replaced by the notion of common belief. Essentially, this idea of pinning down an equilibrium by weakening the CKA is the central feature of the global game approach which introduces a natural perturbation on games with complete information. We argue that since common belief is another form of departure from the CKA, it can also obtain the results attained by the global game framework in terms of selecting an equilibrium. We provide here necessary and sufficient conditions. Following the program of weakening the CKA, we weaken the notion of common belief further to provide a less stringent and a more natural way of believing an event. We call this belief process as iterated quasi-common p-belief which is a generalization to many players of a two-person iterated p-belief. It is shown that this converges with the standard notion of common p-belief at a sufficiently large number of players. Moreover, the agreeing to disagree result in the case of beliefs (Monderer & Samet, 1989 and Neeman, 1996a) can also be given a generalized form, parameterized by the number of players.
Keywords:	common p-belief; common knowledge assumption; global games
JEL:	D83 C70

The Shapley-Shubik Index in the Presence of Externalities

The Shapley-Shubik Index in the Presence of Externalities

Date:	2016
By:	Mikel Alvarez-Mozos (Universitat de Barcelona) José María Alonso-Meijide (Universidade de Santiago de Compostela) María Gloria Fiestras-Janeiro (Universidade de Vigo)
URL:	http://d.repec.org/n?u=RePEc:ewp:wpaper:342web&r=net
	In this note we characterize the restriction of the externality-free value of de Clippel and Serrano (2008) to the class of simple games with externalities introduced in Alonso-Meijide et al. (2015).
Keywords:	Externality-free value, Shapley–Shubik index, Partition function.
JEL:	C71

On Behavioral Macroeconomics, Globalization, and Economic Growth

On Behavioral Macroeconomics, Globalization, and Economic Growth

Date:	2015-06-18
By:	Rosas-Martinez, Victor H.
URL:	http://d.repec.org/n?u=RePEc:pra:mprapa:70751&r=net
	We assess theoretically the effect of forming a free trade union on the total production of a nation, where such effects are caused by the absorption of technologies. A popular metaphor describes the people as crabs in a bucket because when one crab tries to scape, the others pull it down avoiding a possible way out for all of them. Given this knowledge, posteriorly and independently of the income inequality levels, we extend our analyses to consider the effect of envy in a macroeconomic level on the total production, and draw the implications which this phenomenon has on the formation of free trade unions. We make strategic policy recommendations to allow the achievement of a globalization that benefits each member nation, where we show that the great trade union might have to start with gradual and charitable subregional agreements.
Keywords:	International Trade; Technological Absorption; Behavioral Macroeconomics; Economic Growth; Trade Policy
JEL:	O11 O24

Management and Marketing Sciences’ Reaction to the Networked World

MANAGEMENT AND MARKETING SCIENCES’ REACTION TO THE NETWORKED WORLD

By:	Percin Batum (Anadolu University)
URL:	http://d.repec.org/n?u=RePEc:sek:iefpro:3205699&r=net
	The purpose of the exploratory study is to compare the perspectives of management and marketing sciences on networks and reveal out why and how firms become connected and interdependent, and how the relationships affect their ability to compete according to these perspectives. For this purpose, network theory has been taken as a common ground. The management theories which form the network theory and relationship marketing have been discussed. In this paper, the difference between the perception of management and marketing sciences on networks have been expressed in terms of the components of ARA Model. It is possible to notice that some issues have been reverted under different components. This paper aims to put emphasize on that the two arm in arm sciences are in the opposite edges and explain why by presenting the attitude of two different sciences to networks through a model which explains the network theory. It is hoped that this paper helps decision takers to be enlightened if they act as a manager or marketer.
Keywords:	Relationship marketing, The network approach, ARA model, Interaction approach, Resource dependence theory, Social exchange theory, Institutional theory
JEL:	M31 L19 M19