Working Papers

Platform liability and innovation

with D-S. Jeon (TSE) and Y. Lefouili (TSE). Last Updated: February 2024. R&R @ International Economic Review

We study a platform's incentives to delist IP-infringing products and the effects of holding the platform liable for the presence of such products on innovation and consumer welfare. For a given number of buyers, platform liability increases innovation by reducing the competitive pressure faced by innovators. However, there can be a misalignment of interests between innovators and buyers. Furthermore, platform liability can have unintended consequences, which overturn the intended effect on innovation. Platform liability tends to increase (decrease) innovation and consumer welfare if the elasticity of participation of innovators is high (low) and that of buyers is low (high).

Data-driven market leadership and price coordination

with Y. Gu (Henley Business School) and C. Reggiani (JRC Digital Economy & Manchester). Last Updated: May 2024. R&R @ Information Systems Research (4* CABS). Old title:  exclusive data, price manipulation and market leadership.

The rapid development of information systems has allowed many tech companies to gather and analyse vast amounts of individual consumer data, creating detailed consumer profiles. Some of these data is often complemented by the one collected by specialised data broker firms that have started selling consumer profiles to businesses. These granular consumer profiles, combined with powerful computing and algorithms, enable data-rich firms to offer real-time personalised deals. This article proposes a game-theoretical model to examine the issue of exclusive access to consumer data for price personalisation and its impact on competitive strategies and welfare by altering firms' strategic incentives. We show that exclusive access to a list of consumers can provide incentives for a firm to endogenously assume the price leader's role, and induce a higher rival's price. Prices and profits, however, are non-monotonic in the share of profiled consumers. For an intermediate share, price leadership entails an equilibrium outcome characterised by supra-competitive prices and low consumer surplus. For a limited share, the incentive to lead is absent, whereas for a large share, competition kicks in and price coordination no longer takes place. These results hold qualitatively in a large number of extensions that include both firms owning data endowments, investing in data gathering or buying them from data brokers, loyal consumers being profiled, and imperfect information about consumers' preferences.

Big tech lending and business expansion

with Leonardo Gambacorta (Bank for International Settlements) and Bruno M. Parigi (Padova). SubmittedAwarded the BIS Research Fellowship

This paper analyzes the incentives for a big tech platform to offer lending to vendors on their e-commerce marketplaces. Lending allows the big tech to attract more vendors and extract transaction fees,  using interest rates and fees as tools for price discrimination among vendors with heterogeneous investment opportunities. When  the big tech is not active in the lending market, it may set high  fees that deter bank lending and ration  credit-worthy vendors. However, when the big tech is active in the lending market, it can set both interest rates and fees, subsidizing loans to attract investors but raising fees on all vendors. This cross-subsidization may attract opportunistic borrowers, tempering lending incentives. The welfare impact of big tech lending is ambiguous as jacking up fees may hurt vendors with no investment opportunities. A sufficient condition for big tech lending to improve welfare is that the big tech finds it optimal to lend when the bank wouldhave rationed investors.

This paper reviews recent studies on the impact of changes in market structure on investments. First, we examine the relationship between competition inten- sity and investments from both theoretical and empirical perspectives. Second, we discuss the impact of mergers among competitors on firms’ incentives to in- troduce new products and to undertake cost-reducing and quality-enhancing investments. Last, we explore how acquiring an innovative entrant can af- fect the investment incentives of both the acquiring entity and the acquired company.

Work in Progress

Design and governance of quality on a digital platform 

with Özlem Bedre-Defolie (EUI)  and Bjørn Olav Johansen (Bergen) In progress

Business strategy and regulation for generative AI firms

Gáston LLanes (PUC Chile) In progress

Deceptive features and hidden prices: the case of Airbnb cleaning fees

with Michelangelo Rossi (Telecom Paris), Kevin Tran (Bristol), and Mark Tremblay (Las Vegas) In progress

Competition for prominence

with P. Belleflamme (UCLouvain) and F. Ciotti (UCLouvain). Last Updated: August 2023. New version coming soon

Platform duality and network externalities

with A. Gautier (Liège) and S. Shekhar (TISEM Tilburg). [TSE Video Talk], New version coming soon

Platform design in the healthcare sector

with C. Canta (Toulouse Business School), A. Mantovani (Toulouse Business School), and  C. Reggiani (JRC Digital Economy). In progressFunded by TEPREME ANR Project 

Vertical relations within a platform ecosystem

with Fabio Manenti (Padova) and Luca Sandrini (ZEW Mannheim). In progress
Mergers and investments in new products with Anna D'Annunzio (Toulouse Business School), Bruno Jullien (TSE), and Yassine Lefouili (TSE). In progress

Publications

Superstar exclusivity in two-sided markets. Management Science. 2024

with  E. Carroni (Bologna) and S. Shekhar (TISEM Tilburg).

Content moderation and advertising in social media platforms. Journal of Economics & Management Strategy. Forthcoming

with Martin Quinn (Rotterdam School of Management). Awarded the Giorgio Rota Best Paper Award 2019.

Privacy regulation and quality-enhancing innovation, The Journal of Industrial Economics. 2024.

with Y. Lefouili (TSE) and Y. L. Toh (Federal Reserve Bank of Kansas City). 

Collusion sustainability with a capacity constrained firm. Oxford Economic Papers. 2024.

with A. Pignataro (ARERA). 

Who supports liberal policies? A tale of two referendums in Italy. Economics Letters. 2023.

with F. Principe (Bergamo). 

The economics of platform liability. European Journal of Law & Economics. 2022.

with Y. Lefouili (TSE). [Presentation @ Economics of Platforms]

Data brokers co-opetition. Oxford Economic Papers. 2022.

with Y. Gu (Henley Business School) and C. Reggiani (JRC Digital Economy). 

Do-it-yourself medicine? The impact of (unintended) light cannabis liberalization on prescription drugs. Journal of Health Economics. 2020.
with V. Carrieri (Univ. Calabria) and F. Principe (Bergamo)

Light cannabis and organized crime. Evidence from unintended liberalization in Italy . European Economic Review. 2019.
with V. Carrieri (Univ. Calabria) and F. Principe (Bergamo) 

Vaccine hesitancy and (fake) news: Quasi-experimental evidence from Italy. Health Economics. 2019.
with V. Carrieri (Univ. Calabria) and F. Principe (Bergamo) 

Intermodal competition and substitution. HSR versus air transport: understanding the socio-economic determinants of modal choice. Research in Transportation Economics. 2020.
with A.S. Bergantino (Bari). Special Issue: Air Transport Markets, Strategies and Policies 

Intra- and inter-regional commuting. Assessing the role of wage differentials. Papers in Regional Science. 2019.
with A.S. Bergantino (Bari).

Other Research Projects


Reproducibility in Management Science, Management Science 

(with Miloš Fišar, Ben Greiner, Christoph Huber, Elena Katok, Ali I. Ozkes, and the Management Science Reproducibility Collaboration). Note: Member of the Management Science Reproducibility Collaboration.