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  1. Lessons from innovation economics for digital platform policy
    Author: Bauer, Johannes M.; Prado, Tiago S.
    Published: [2020]
    Publisher:  International Telecommunications Society, Online

    This paper relates to current concerns about the high concentration of digital platform markets and the effects of large companies such as Amazon, Facebook, Google, and Microsoft, on innovation. Several stakeholders and analysts assert that digital... more

    Access:
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DSM 102
    Inter-library loan:
    No inter-library loan

     

    This paper relates to current concerns about the high concentration of digital platform markets and the effects of large companies such as Amazon, Facebook, Google, and Microsoft, on innovation. Several stakeholders and analysts assert that digital platforms have become so dominant that they slow the speed of innovation and that regulatory and antitrust intervention is needed to protect the public interest. Despite the strong claims, few systematic studies have examined the positive and negative effects of digital platforms on innovation. This paper seeks to contribute to closing this gap by pursuing three overarching objectives. First, it develops a theoretical framework to deepen our understanding of the multi-faceted relations between digital platforms and innovation. Second, it discusses which empirical evidence could be used to examine the multitude of potential, positive and negative, impacts. Third, the paper discusses the implications of these largely conceptual arguments for the design of policies toward digital platforms. In contrast to traditional regulatory theory and practice, which often uses static economic optimization models, much of innovation economics emphasizes that incentives to introduce new processes, create new products, services, designs, and business models are strongest in out-of-equilibrium processes. However, there are conditions under which market power and the interests of large companies do not align well with the broader goals of vibrant innovation. The paper argues that the most promising instruments to address these issues affect the constitution of digital markets.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/224846
    Series: ITS Conference : online event : 14th–17th June 2020 ; 8
    Subjects: Digital platforms; innovation economics; innovation ecosystems; market power; regulation; competition policy
    Scope: 1 Online-Ressource (circa 34 Seiten), Illustrationen
  2. Kill zones?
    effects of big tech start-up acquisitions on innovation : paper prepared for presentation at the International Telecommunications Society (ITS) Biennial Conference Gothenburg, Sweden, June 21-23, 2021
    Author: Prado, Tiago S.
    Published: [2021]
    Publisher:  International Telecommunications Society, Online

    This paper investigates short-term effects of big tech start-up acquisitions on innovation empirically. Innovation research has found a strong positive, causal relationship between VC investment and innovation. Using this insight, we can explore the... more

    Access:
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DSM 119
    Inter-library loan:
    No inter-library loan

     

    This paper investigates short-term effects of big tech start-up acquisitions on innovation empirically. Innovation research has found a strong positive, causal relationship between VC investment and innovation. Using this insight, we can explore the repercussions of big tech start-up acquisitions on innovation by examining their effects on venture capital (VC) activity. We analyze a very large set of observations of more than 32,000 venture capital deals in more than 170 different segments of the tech industry and almost 400 tech start-up acquisitions made worldwide between 2010 and 2020 by Google, Facebook, Amazon, Apple, and Microsoft. Our results suggest a positive, causal impact of big tech start-up acquisitions on venture capital activity, challenging claims about the creation of "kill zones" for start-ups after acquisitions are made by the big techs. For example, after controlling for other factors that may impact VC activity, like initial public offerings (IPOs) and other mergers and acquisitions (M&As), we found an average increase of 30.7% in the total amount of VC funding towards U.S. based start-ups of the same industry segment in the four quarters following a big tech start-up acquisition. For deals targeting European start-ups, we found an increase of 32.1% in the VC funding in in the first quarter after a big tech start-up acquisition. Finally, our findings show that such positive effects, when existent, persist for a few months only, and so do not seem to have lasting impacts on the innovation incentives in the the start-up ecossystem. Our empirical findings should inform current competition policy discussions on imposing restrictions to acquistions of start-ups by the big techs.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/238049
    Series: Digital societies and industrial transformations : policies, markets, and technologies in a post-Covid world : 23rd biennial conference
    Subjects: kill zone; platform; big tech; venture capital; innovation
    Scope: 1 Online-Ressource (circa 52 Seiten), Illustrationen
  3. Assessing the market power of digital platforms
    Paper prepared for presentation at the International Telecommunications Society (ITS) Biennial Conference Gothenburg, Sweden, June 21-23, 2021
    Author: Prado, Tiago S.
    Published: [2021]
    Publisher:  International Telecommunications Society, Online

    In this conceptual paper, I propose a framework for measuring the market power of digital platforms. The rise of big technology companies that act both as intermediary platforms and providers of services and goods in several markets has heightened... more

    Access:
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DSM 119
    Inter-library loan:
    No inter-library loan

     

    In this conceptual paper, I propose a framework for measuring the market power of digital platforms. The rise of big technology companies that act both as intermediary platforms and providers of services and goods in several markets has heightened concerns about potential economic harms brought by the concentrated structure of the digital economy. However, the operationalization of market power in the platform economy and the procedures to define which digital platforms and markets should be targeted by pro-competitive remedies, either under a competition policy framework or under a regulatory regime, remain highly contested. I demonstrate that large technology platforms can leverage their market power across markets in the digital economy to make their end users unlikely to switch to smaller competitors, even when they offer better services. Based on this analysis, I argue that market-specific approaches, such as the commonly used Significant Market Power (SMP) framework, would have limited impact in promoting competition in digital markets. I then propose a new set of tools aimed to identify the market power of digital platforms in two-sided markets and suggest some policy alternatives to harness the potential of pro-competitive remedies in the digital economy.

     
    Export to reference management software   RIS file
      BibTeX file
    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/238048
    Series: Digital societies and industrial transformations : policies, markets, and technologies in a post-Covid world : 23rd biennial conference
    Subjects: Digitale Plattform; Marktmacht; Wettbewerb; Electronic Commerce; digital platform; digital economy; market power; competition policy,regulation
    Scope: 1 Online-Ressource (circa 50 Seiten), Illustrationen