Luis Martin' Abreu's PhD Thesis, June 30th

June 30, 2022 Research

Luis MARTINS ABREU will defend his thesis on Thursday 30 June at 09:30 AM (Auditorium 6 and zoom)
« Essais en théorie économique appliquée d’actualités en ligne et des réseaux »

Supervisor: Professor Doh-Shin Jeon

To attend the conference, please contact the secretariat Elvire Jalran

Memberships are:

  • Doh-Shin JEON, Toulouse School of Economics, Supervisor
  • Jay Pil CHOI, Michigan State University, Rapporteur
  • Robert SOMOGYI, Budapest University of Technology and Economics, Rapporteur
  • Karine VAN DER STRAETEN, CNRS-TSE,  Examinatrice

Abstract :

The first chapter of this thesis considers an ad-financed media firm that chooses the ideological location of its news and targets consumers who can share the news with their followers on social media. After studying how each targeted consumer's incentive to share the news is shaped by the location of the news and the distribution of her followers’ ideological locations, we study the firm's strategy to maximize the breadth of news sharing and find that when the mean (respectively, the variance) of the followers' ideological locations is a convex (respectively, concave) function of a targeted consumer's location, the firm is likely to produce polarized news.

In the second chapter, we consider a monopoly platform providing a continuum of vertically differentiated content and study the design of the optimal screening contracts when consumers have binary types. A contract specifies a set of content, a price and whether or not the content consumption is subject to advertising. We distinguish top-down content allocations from bottom-up allocations and allow for informational bundling of a content set. We find that advertising can induce the platform to use bottom-up allocation for low-type consumers while subscription-based contracts always use top-down allocations. Advertising tends to induce the platform to expand the amount of content consumed by resorting to informational bundling, which increases consumer surplus. When content consumption cannot be subsidized by a negative price, the platform may find it optimal to offer a freemium contract, which expands (reduces) the consumption set, relative to the case of consumption subsidy, for bottom-up allocations (top-down allocations) and thereby increases (reduces) consumer surplus. Finally, when high types experience larger ad nuisance than low types, the platform may have a socially excessive incentive to show advertising to low types in order to extract the information rent of high types.

In the third chapter, we study equilibrium patent licensing networks that arise among symmetric competing firms. We consider licensing agreements that cannot specify royalties but can use fixed fees and focus on bilaterally-efficient networks. We find that the complete network, which generates the most competitive outcome is always bilaterally efficient. When there are three symmetric firms, we provide a complete characterization of all bilaterally-efficient licensing networks. When patents are independent, we find that the star network leading to monopoly is never bilaterally efficient. In particular, when the cost reduction from patent is large enough, there is a big contrast: although a multilateral licensing agreement allows the firms to implement the monopoly outcome, the complete network is the unique bilaterally-efficient network. We provide a general condition under which the complete network is both the unique bilaterally-efficient outcome and the unique industry-profit-maximizing outcome for any given number of firms. Our results offer clear-cut policy implications in favor of fixed-fee licensing relative to two-part tariff licensing including royalties.