Benefits and Drawbacks of Digital Platforms with Policy Analysis
Date
2023-08-25
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Abstract
Digital platforms offer numerous advantages to consumers and businesses. Our first stream of research examines the role of shared platforms that are characterized by offering exclusive services to customers, also known as member-only services. Such services mitigate customers' disutility of online purchasing and enable shared platforms to reduce the risk of losing customers to competitors. Using analytical modelling methodologies, our first research chapter aims to understand the economic and social implications of shared platforms. Our finding in this chapter shows that shared platforms maximize their profits by subsidizing the customer-side of the market. Although digital platforms have enlarged contestability in many markets by allowing small firms to develop innovative solutions to compete with monopolies, they have brought new challenges. The second research stream uses analytical modelling methodologies to study two important challenges of digital platforms: biased intermediation and digital piracy. As digital platforms have grown in size and influence, there are concerns about their engagement in anti-competitive behavior, such as having incentives to offer matches that are more profitable to themselves rather than the most relevant ones to users. This conduct is called biased intermediation. Our first research chapter in this stream quantifies the economic and social impacts of biased intermediation and examines whether imposing taxes on digital platforms' revenue can mitigate the potentially harmful effects of biased intermediation. With the rise of digital platforms, it has become easier for individuals to access and share copyrighted material without permission. This has had a significant impact on the revenues of the entertainment industry, with losses estimated to be in the billions of dollars annually. Thus, policymakers must understand the new market realities of digital platforms and reinterpret traditional regulatory approaches accordingly. The second research chapter in the second stream studies how a policymaker can mitigate the harmful effects of digital piracy by imposing fines on pirates, subsidizing legal purchases, and supporting the publisher through restitution within a balanced budget.
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Keywords
Policy Analysis, Digital Piracy, Shared Platforms, Biased Intermediation, Digital Platforms
Citation
Fereidouni, M. (2023). Benefits and drawbacks of digital platforms with policy analysis (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.