Yaxin LI 's PhD Thesis, July 7th, 2023

July 07, 2023 Research

  Yaxin LI will defend her thesis on Friday 7 July at 15:00 (Fully zoom)
« Three Essays on Digital Economy and Platform Competition »
Supervisors: Professor Renato Gomez and Doh-Shin Jeon

To attend the conference, please contact the secretariat Christelle Fotso Tatchum

Memberships are:

  • Renato Gomes : Senior researcher CNRS-TSE-R Supervisor
  • Doh-Shin Jeon : Professor, University Toulouse Capitole, Co-directeur de thèse
  • Yassine Lefouili : Professor, University Toulouse Capitole, President
  • Agnieszka Rusinowska : Researcher CNRS - Sorbonne, Rapporteure
  • Marie-Laure Allain :Researcher CNRS - CREST- Ecole Polytechnique Examinatrice
  • Francis Bloch : Professor, Université Paris 1- Sorbonne Rapporteur

Abstract :

In Chapter 1, I develop a dynamic model where two data-driven platforms compete for users' attention. The quality of the service on each platform improves as more user data is available. At each period, platforms choose between current monetization through advertisement, or the accumulation of more user and therefore more data, in the future. Accordingly, I relate the market outcomes in equilibrium to platforms' initial market shares and data productivities. I show that market co-participation prevails when data productivities of both platforms are small. Market tipping is more likely to occur when one of the platforms has a large data productivity and enjoys a large initial market share. I also explore the effects of compulsory data sharing. Market tipping is less likely to occur with data sharing. Besides, data sharing by both platforms, or by the platform with a large advantage of data productivity increases consumers' surplus.

In chapter 2, motivated by several examples, including Internet of Things patent licensing, we analyze a model where one or more complementary platforms choose prices for a group of downstream devices that exhibit network externalities. We show how prices depend on each device's Katz-Bonacich (or eigenvector) centrality in a network defined by the demand externalities, and how the relevant network differs for an ecosystem monopolist, a social planner, or a group of complementary platforms. For the latter case, we revisit Cournot's analysis of complementary monopolies and show that in our setting, it is possible for the total price of a particular device to decline when the number of monopoly platforms increases. Finally, we analyze a partial merger that leaves complementary monopolies on just one side of a platform, producing a novel tradeoff between internalizing double marginalization and externalizing network effects. Overall, this study offers a tractable model of multi-product ecosystems, and contributes to the two-sided market literature by analyzing complementary platforms in a general multi-sided market.

In chapter 3, I study a strategic network game of search, where M retailers sell a product with unknown quality in a competing market. Consumers in the network choose between search and free riding, and choose to adopt or not after search. Consumers trade off between search cost and information efficiency. The searchers acquire information about the quality and prices, while free riders update their believes by observing the adoption behavior of neighbors. In equilibrium, consumers' search strategy exhibits non-increasing threshold property: consumers with more neighbors are more likely to be free riders. I show that although there exist multiple equilibria, when search cost is small enough, there exists a unique interior BNE such that both searchers and free riders coexist in the market, and the prices are larger than marginal cost. I also investigate the impact of network structure on equilibrium outcomes. When the network is more connected, consumers engage in less search, the prices are higher, and the consumers' surplus is reduced.