In progress

This paper investigates the interplay between interoperability and the incentives to invest in cybersecurity in digital markets.  We develop a two-sided symmetric duopoly model in which cyberattacks create a congestion-like externality, and interoperability amplifies hackers’ incentives to target connected platforms. We show that interoperability affects cybersecurity investment through multiple channels, potentially producing a non-monotonic relationship: low interoperability promotes risk-mitigation efforts, whereas high interoperability may discourage investment due to a public good effect. We then compare private and social incentives to adopt interoperability, identifying potential sources of misalignment. Finally, we extend the baseline model to account for additional factors shaping the desirability of interoperability, including platforms’ business models, users’ awareness of cyber risk, asymmetries in user bases, and the role of alternative compensation schemes.

We study how fixed-fee technology licensing affects firms’ choices of R\&D direction and intensity in a general duopoly model with uncertain innovation. We show that when R&D costs are sufficiently convex, firms choose the technological regime that minimizes equilibrium expenditure; depending on how the licensing fee is tied to realized innovation quality, firms may choose to pursue a common technological trajectory or may find it more beneficial to diversify. Our results indicate that licensing can mitigate the directional inefficiency identified in prior work, by fostering greater market innovation and, under some conditions, promoting efficient differentiation of R&D projects. However, we also show that licensing can lead to new forms of directional distortions that arise when firms efficiently diversify their research but equilibrium investment is too low, potentially offsetting the consumer gains from technological diversity. The analysis also enables us to explore a potential inefficiency in ex-ante licensing contracts. We illustrate our findings in a Cournot model of process innovation.

We study on-platform tying by a dominant platform that controls a primary access point and operates an adjacent specialised service. A rival service can reach users both through the dominant platform and through a direct channel. In a two-sided market where platforms charge sellers and seller participation affects consumer demand, tying improves the integrated service, but also shifts demand away from the rival. We show that lower mediated demand reduces seller participation on the rival platform, weakening the rival also for users who access it directly. As a result, tying can reduce consumer surplus and welfare once the direct channel is sufficiently large. We also compare tying with demotion and with a common-access policy, and show that our main insights carry over to a one-sided model in which network effects operate among consumers who pay directly for the specialised service.

This paper investigates how cyberattacks affect the market valuation of European financial institutions. Using an event study methodology on 31 cyber incidents between 2016 and 2024, we document a clear and statistically significant negative market reaction concentrated around the announcement day; we found no evidence of declines prior to the announcement, so we rejected the hypothesis of insider trading. A time‐trend analysis reveals diverging patterns: while the impact of non‐confidential attacks has intensified, the market response to confidentiality breaches has weakened, consistent with improved disclosure and crisis management practices.

This paper provides an analysis of multihoming in the online food delivery market, focusing on riders and customers, while accounting for restaurants. Using two cross-sectional surveys from the Philippines, we examine multihoming patterns and apply a random forest method to identify the main factors associated with multihoming on both sides. We then embed these factors into classical econometric models alongside proxies for prices, indirect network effects, and platform loyalty strategies. Our results show that for riders, multihoming is strongly influenced by network size and platform loyalty: higher demand density leads riders to use multiple platforms, certain demographics, while uniforms, pay schemes, and tipping encourage them to specialize. For customers, multihoming depends less on demographics or spending and more on economic incentives: larger rider networks and more competing apps increase multihoming, whereas higher delivery fees and in-house delivery availability reduce it.