When «the» market loses its relevance: an empirical analysis of demand-side linkages in platform ecosystems

2022-02-16
13:00

Speakers

When «the» market loses its relevance: an empirical analysis of demand-side linkages in platform ecosystems

Dr. Bruno Carballa Smichowski

European Commission – Joint Research Centre

Researcher at the Joint Research Centre of the European Commission - Unit B6 - Digital Economy at European Commission. Collaborative Economy and Data Economics Expert at Chronos (Media Mundi). PhD Scholar and Teaching Assistant at Université Paris 13.

Host

Analyst DELab UW

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Recent lite­ra­tu­re has shown that the exi­sten­ce of sup­ply and demand-side non-gene­ric com­ple­men­ta­ri­ties („demand-side lin­ka­ges”) within eco­sys­tems questions the per­ti­nen­ce of defi­ning a sin­gle rele­vant mar­ket com­pri­sing sub­sti­tu­te pro­ducts (”sub­sti­tu­ta­bi­li­ty appro­ach”). Howe­ver, empi­ri­cal metho­do­lo­gies to measu­re the­se lin­ka­ges and assess the com­pe­ti­ti­ve dyna­mics under­pin­ning them are lac­king. Using recent data from inter­net traf­fic betwe­en the major 246 Euro­pe­an digi­tal plat­forms, we deve­lop such a metho­do­lo­gy and test some the­ore­ti­cal fin­dings of the eco­sys­tems lite­ra­tu­re with major impli­ca­tions for com­pe­ti­tion and regu­la­to­ry ana­ly­sis. We cor­ro­bo­ra­te that demand-side lin­ka­ges are a non-negli­gi­ble phe­no­me­non: 18% of the­se plat­forms show them. Howe­ver, unli­ke what the eco­sys­tems lite­ra­tu­re pre­dicts, in rough­ly half of the cases they do not link com­ple­men­tors but plat­forms com­pe­ting in at least one mar­ket. Final­ly, whi­le, as expec­ted, we obse­rve demand-side lin­ka­ges mostly within indu­stry-defi­ned eco­sys­tems, we find evi­den­ce of indu­stry-agno­stic eco­sys­tems. The­se could be orche­stra­ted „orga­ni­cal­ly” by plat­form users inste­ad of by a firm. We conc­lu­de that the sub­sti­tu­ta­bi­li­ty appro­ach is not obso­le­te, but requ­ires being com­ple­men­ted with alter­na­ti­ve appro­aches in order to i) take into acco­unt coope­ti­tion within the same rele­vant mar­ket and ii) ana­ly­ze how the com­pe­ti­ti­ve pro­cess in one mar­ket can impact the welfa­re gene­ra­ted in ano­ther (indu­stry­’s) mar­ket thro­ugh non-gene­ric complementarities.

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A series of Polish-language meetings during which researchers and guest speakers look at issues related to digital transformation, new technologies, innovation and digital research methods.

The aim of the "Digitisation under the closer look of science" seminars is to build cooperation between academia, the public sector and business. Scientists share their research findings and have the opportunity to discuss them with experts. The results of their work are available on the DELab UW website.

When «the» market loses its relevance: an empirical analysis of demand-side linkages in platform ecosystems
European Commission – Joint Research Centre
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