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Two-sided Markets and Digital Platforms

2019/2020
Учебный год
ENG
Обучение ведется на английском языке
3
Кредиты
Статус:
Курс по выбору
Когда читается:
4-й курс, 3 модуль

Course Syllabus

Abstract

The course introduces the basic framework for the formal analysis of platform operators in the context of two-sided markets with a focus on online markets. Tutorials will be devoted to problem-solving and discussions on actual economic topics relevant to the course content.
Learning Objectives

Learning Objectives

  • First, basic theory of platform competition and switching costs, network externalities, and pricing in two-sides markets is introduced.
  • Second, an applications to the antitrust and regulatory issues are considered.
  • Third, issues related to the specific online multi-sided industries are covered.
Expected Learning Outcomes

Expected Learning Outcomes

  • Familiarize students with the concepts of platform competition and switching costs, network externalities, and pricing in two-sides markets
  • Provide students with analytical approaches to analyzing competition policy on the two-sided markets.
  • Familiarize students with the economics of specific multi-sided industries (online search engines, online advertising).
Course Contents

Course Contents

  • Basic analytical concepts for markets with online platform
    - market intermediation and definition of a two-sided market; - direct and indirect network externalities; - singlehoming and multihoming
  • Internet platform market structures: platforms, dealers, matchmakers
    - market intermediation: dealing vs decentralized trade; intermediary as a platform vs intermediary as a dealer; - online platforms as matchmakers: “winner-takes-it-all” and “divide-and-conquer” at equilibrium
  • Pricing and competition at two-sided platform markets
    - network externalities and “chicken and egg“ problem; - model of a monopoly on a two-sided market; - model of a duopoly on a two-sided market; - model of a competitive bottleneck
  • Antitrust regulation of two-sided platform markets
    - market definition and market power; - exercise of unilateral market power; - mergers and coordination practices; - other antitrust issues
  • Search engines, online media, and advertising
    - online media platforms and advertising; - model of online platforms as gatekeepers; - search engines and sponsored search auctions
  • Asymmetric information and information design at internet platform markets
    - online platforms with uncertainty regarding the types of buyers and sellers; - optimal information design for online platform markets
Assessment Elements

Assessment Elements

  • non-blocking Written exam
  • non-blocking Homework assignment
  • non-blocking In-class test
Interim Assessment

Interim Assessment

  • Interim assessment (3 module)
    0.1 * Homework assignment + 0.3 * In-class test + 0.6 * Written exam
Bibliography

Bibliography

Recommended Core Bibliography

  • Tirole, J. (1988). The Theory of Industrial Organization. Cambridge, Mass: The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=nlebk&AN=11386

Recommended Additional Bibliography

  • Armstrong, M. (2006). Competition in two-sided markets. RAND Journal of Economics (Wiley-Blackwell), 37(3), 668–691. https://doi.org/10.1111/j.1756-2171.2006.tb00037.x
  • Rochet, J.-C., & Tirole, J. (2003). Platform Competition in Two-Sided Markets. Journal of the European Economic Association, 1(4), 990–1029. https://doi.org/10.1162/154247603322493212