Platform market competition with endogenous side decisions

This paper develops a framework to analyze platform competition in two‐sided markets in which agents endogenously decide on which side of a platform to join. We characterize the equilibrium pricing structure and perform a comparative statics analysis on how the distribution of agents’ preferences affects the platforms’ profits. We also show that the market equilibrium under profit‐maximizing platforms leads to the first best social surplus, which illustrates the importance of the price mechanism to induce more balanced participation across the two sides. This framework can be applied to analyze market competition for “rental” or “sharing” platforms. In addition, we extend our analysis to consider an initial investment stage, which makes participants the owner of some durable goods to rent out.     

Multiple equilibria model with intrafirm bargaining and matching frictions

In this paper, we combine a matching model derived from Pissarides (2000) in the case of large firms with monopolistic competition on the product market and the model of intrafirm bargaining à la Stole and Zwiebel (1996). Moreover, we allow for increasing returns to scale in the aggregate production function leading to multiple equilibria. We study the dynamics of such a framework and propose numerical simulations. We show that labour market regulation can make unlikely the occurrence of the Pareto inferior equilibrium and that product market deregulation can have an effect on employment contrary to the expected result when the economy stands at this equilibrium. We give also some policy recommendations to reach the Pareto superior equilibrium when multiple equilibria exist.     

Product Market Competition,Monetary Policy Regimes and Inflation Dynamics: Evidence from a Panel of OECD Countries

We empirically analyze the impact of product market competition on the responsiveness of inflation to macroeconomic imbalances. If competition is high the response of inflation to lagged inflation, unemployment and import prices is reduced, while inflation is more responsive to changes in productivity growth in countries in which competition is above the OECD average. Given the (‘good luck’) macroeconomic trajectories of the 1990s–2000s, the structural reforms that made goods markets more competitive improved the ability of OECD economies to smooth (dis)inflationary shocks, while changes in the monetary policy framework had a modest role in taming inflation during the Great Moderation.     

How does competition among lodging sharing platforms affect welfare and profits?

We investigate the likely effect on prices, consumer surplus, and profits of intensified competition among peer‐to‐peer lodging platforms. We find that intensified competition in the sharing economy may give rise to some surprising results. For instance, intensified competition may allow platforms to charge higher fees from peer suppliers and lead, therefore, to a decline in consumer surplus. Only if the market of professional hoteliers is highly competitive, intensified competition among platforms leads to the traditional outcome that the entry of more platforms leads to lower fees charged from consumers and to enhanced consumer surplus. We also find that platforms may actually earn higher profits when there is intensified competition among professional hoteliers. In addition, while intensified competition among professional hoteliers leads to a decline in the fees that platforms can charge customers, it may actually result in higher lodging prices. We explain these counterintuitive results by the dual role that the lodging price plays in affecting the welfare of individuals active in the sharing economy. While a higher price has an adverse effect on the welfare of demanders of lodging it benefits peer suppliers of lodging because a higher lodging price raises the compensation they receive when offering lodging capacity to a platform.     

A Reduced Rank Regression Approach to Tests of Asset Pricing

Both the Arbitrage Pricing Theory (APT) and the Capital Asset Pricing Model (CAPM) place restrictions of the cross-sectional variation of conditional expectations of asset returns and of macro indicators. We show that these restrictions imposed on the reference statistical models lead to special cases of the reduced rank regression model. The maximum likelihood problem is solved by canonical correlation analysis. Likelihood ratio tests about the number of factors underlying stock returns are straightforward to calculate, thus allowing discrimination between competing financial theories. Moreover LR tests on the relevance of each macroeconomic indicator within a chosen model can be implemented. Some of the tests are illustrated by an application to Italian stock market data.     

A bottom-up simulation on competition of online interpersonal communication platforms

The competition of interpersonal communication platforms is a complex process affected by various factors. This paper aims to simulate and analyze this process from a bottom-up perspective. Individual platform selection serves as the micro-foundation for the study. The evolution of online interpersonal communication networks, and innovations proposed by online interpersonal communication platforms, would also impact this process by affecting individual selection on those platforms. Three scenarios were designed for this study to simulate typical modes of competition. In this regard, the simulation results were compared to practical cases. Taken together, this bottom-up simulation model could reproduce and anticipate the applied competition process associated with such platforms. Based on this model, it was found that, in any case, one online interpersonal communication platform will eventually monopolize the market, either partly or entirely. The late entrant platform, comprising a major innovation, tends to fail when competing with the incumbent monopoly due to “network externalities.” Even when two competing platforms continue to propose innovations, and they will alternately lead the competition due to those innovations, this type of replacement of their competitive positions in the market may only occur a few times and then disappear completely.

     

Focality advantage in platform competition

We consider a methodology for studying how beliefs shape platform competition based on the notion of a partial focality. The concept of focality is useful for modeling platform competition when the presence of network effects results in multiple equilibria for a certain set of prices. We illustrate how to implement this methodology in both static and dynamic competition between platforms that differ in their basic quality. The initial degree of focality affects the ability of the high‐quality platform to win the market. Yet, dynamic considerations may have a positive or negative effect on this ability.     

Internet of things (IoT) platform competition: Consumer switching versus provider multihoming

Internet of things (IoT) brings new opportunities and represents a new source of welfare and efficiency. However, the emerging consumer IoT platform competition creates the risk of monopoly power due to network effects. Overall, it is likely that both competition (incentivized through lowering consumer switching costs) and cooperation (achieved through interoperability, which enables data portability and service provider multihoming) are needed to maximize social welfare. This article aims to address how consumer switching costs and provider multihoming affect competition of emerging consumer IoT data platforms under different market conditions and regulatory schemes. It utilizes agent-based modelling that is especially suitable when decision making is distributed at a micro level while some rules are applied in a centralized fashion. The obtained findings emphasize the role of the regulator in guiding the market. It seems that when switching costs diminish at all sides of the platforms, consumers and service providers will favour the platform with a higher number of users. Further, service provider multihoming mitigates market concentration on both sides of a platform when switching costs are low. Thus, there seems to be a minimum level of interoperability needed to promote market competition. Further, although data portability gives more freedom to consumers in choosing a platform provider, it may result in a winner-takes-all situation due to strong indirect network effects.     

Can platform competition support market segmentation? Network externalities versus matching efficiency in equity crowdfunding markets

We investigate whether, in spite of the existence of cross‐market network externalities, platform competition can lead to segmentation of the two sides of the market served by the platforms. We address this question in the context of competition between two equity crowdfunding platforms that connect startups looking for capital with prospective investors. Given the heterogeneity in the populations of startups and investors in terms of the riskiness of the former population and the degree of risk aversion of the latter population, we investigate whether there exists an equilibrium where the two populations are segmented to ensure an improved match between them. We find that the segmenting equilibrium can arise only when compatibility in terms of their risk profiles is of high importance to both populations, and compatibility is significantly more important than the size of the network externality considered by startups. Segmentation is likely to improve the welfare of both populations when the basic benefit from any kind of match is relatively high.     

The EU policy for a plastic economy: Reflections on a sectoral implementation strategy

After reviewing the main EU policy documents on the plastic waste issue, this work conceptualises an analysis framework to investigate farmers' attitudes to market‐based tools (i.e., subsidies, tax‐credits, and payback mechanisms in extended producer responsibility schemes) through which the introduction of an operational scheme for a better management of their plastic waste can be incentivised in line with the 2018 European Strategy for Plastics in a Circular Economy. A total number of 1,783 farmers responded to a purpose‐built questionnaire. Results show that most of the plastic waste they produce is piping and packaging and that tax credit represents their most favoured incentivising tool.     

低碳生态控制性详细规划的成本效益分析

公共政策手段必然有其成本,低碳生态城市规划政策也不例外。政策手段带来的成本与效益需要有科学性及客观的分析,才会帮助政府在制定政策及建设项目时提高社会整体经济效率,达到优化经济资源之目的。本文提出需要对低碳城市规划和建设手段进行成本效益分析的必要性,要从科学客观角度建立低碳城市成本效益理论和方法,应用评估低碳城市规划建设政策和投资决定。并针对我国城乡规划体制内具有法定效力的控制性详细规划管理手段,提出在实施低碳生态城市控制指标时要考虑产生的经济成本与效益,以近期完成的石家庄正定新区低碳生态控制性详细规划方案解释。     

Exclusionary practices in two‐sided markets: The effect of radius clauses on competition between shopping centers

We analyze exclusionary conduct of platforms in 2‐sided markets. Motivated by recent antitrust cases, we provide a discussion of the likely positive and normative effects of exclusivity clauses, which prevent tenants from opening outlets in other shopping centers covered by the clause. In a standard 2‐sided market model, we show that exclusivity agreements are especially profitable for the incumbent and detrimental to social welfare if competition is intense between the 2 shopping centers. We argue that the focus of courts on market definition is misplaced in markets determined by competitive bottlenecks.     

广义有效资本市场:财务理论的新视野

以深市1998-2006年的349家A股上市公司为样本,实证检验了广义有效市场假说(GEMH)的财务管理理论。广义有效市场假说用价格的分形引子来表示风险资产的收益;并把风险的定义从收益的方差或标准差复原为资本的耗散程度,从而用耗散资产定价模型(DAPM)来替代资本资产定价模型(CAPM);用双β财务政策理论来替代MM理论;而市场效率可以用给定市场的资本效率吸引子与其均衡市场的资本效率吸引子之间的比率来进行评价。     

Decision-making in the two-act antitrust decision problem

This paper focuses on the antitrust decision-making process as it pertains to anti-merger policy as a special case of the more general two-act decision problem. We employ the Analytic Hierarchy Process to analyze some prominent antitrust merger decision. The analysis suggests that the courts have failed to give potential competition its due when it acts to dampen any alleged market power accruing to the market leader, which in turn suggests that the defendants would be well advised to reorient the weight that they give to potential competition in designing their defense.     

香港住房市场中的政府干预及其启示

首先回顾了香港政府干预私人住房市场的背景和已经使用的政策措施,然后系统总结了其在不同市场条件下干预住房市场的政策选择,并分析了使用这些干预政策所取得的效果。结果表明,香港政府对住房市场的干预,在一定程度上减小了市场波动带来的冲击,但也存在干预目标不能及时调整、货币政策工具有效性未如预期及对需求的干预重视不足等问题。分析研究香港政府干预住房市场的经验与局限性,有利于内地政府提高干预住房市场的有效性。     

Competing Platforms

Why do competing platforms or networks exist? This paper focuses on instances where the value of a platform depends on the adoption decisions of a small number of firms, and analyzes the strategic competition among platforms to get this oligopolistic side on‐board. I study a bilateral contracting game among platforms and firms that allows for general externalities across both contracting and noncontracting partners, and examine when a market will sustain a single or multiple platforms. When firms can join only one platform, I provide conditions under which market‐tipping and/or market‐splitting equilibria may exist. In particular, even without coordination failure, congestion effects, or firm multihoming, multiple platforms can co‐exist in equilibrium despite being inefficient from the perspective of the contracting parties. Expanding the contracting space to include contingent contracts may exacerbate this inefficiency.     

Technology ladders and R&D in dynamic Cournot markets

Motivated by dramatic and unpredictable technological advances in energy production (for instance drilling and extraction of shale oil), we extend Cournot models of competition to incorporate research and development (R&D) that can lead to (stochastic) drops in production costs. Our model combines features of patent racing with dynamic market structure, capturing the interplay between the immediate competition in terms of production rates and the long-term competition in R&D. The resulting Markov Nash equilibrium is found from a sequence of one-step static games arising between R&D successes, and several numerical examples and extensive analysis of the emerging comparative statics are presented. Analyzing the relationship between current market dominance and the level of R&D investments, we find that market leaders tend to invest more, which in some sense makes oligopoly dynamically unstable. We show that anticipated market transitions have long-term impact; for example the potential of future monopoly can spur R&D investment now, even if the firm is presently uncompetitive and not actively producing. We also show that, surprisingly, random innovations have an ambiguous effect on R&D. This feature, which is driven by the Cournot framework, contrasts with the common situation whereby uncertainty lowers innovation and delays R&D investments. Finally, we demonstrate that increased competition may actually increase efforts to innovate through higher desire to achieve dominance. This would match the anecdotal evidence that the threat of market entrants forces incumbents to maintain high R&D.     

Asset-Liability-Matrix Analysis Derived from the Flow-of-Funds Accounts: The Bank of Japan's Quantitative Monetary Policy Examined

The first purpose of this paper is to present the compilation procedure of the Asset- Liability-Matrix (ALM) from the Flow-of-Funds (FOF) accounts in the balance sheet format that is widely available in IMF member countries. The introduction of ALM into the framework of FOF analysis enables us to utilize the affluent assets of input-output analysis, notably the concept of Leontief inverse. The second purpose of this article is to demonstrate the application of ALM to the examination of the quantitative monetary policy introduced by the Bank of Japan (BOJ) in March 2001. It can be said, as a conclusion, that there was a tactical error in the quantitative monetary policy adopted by BOJ in terms of the combination of money market operations. We believe that the ALM framework of FOF analysis is a powerful and practical device to fulfil this kind of examination.