Essays on Industrial Organisation: Digital Platform Competition, Technology Licensing, and Vertical Markets

Abstract

This thesis consists of four chapters on the industrial organisation of digital platforms and vertical markets. The first chapter addresses how competition between digital platforms is affected by targeting technologies, stricter privacy regulation, and consumer multi-homing. Since the quality of targeting technologies improves with consumer data, targeting in creases the importance of attracting consumers. Whereas previous literature has shown that this could result in fierce competition when consumers subscribe to only one plat form (i.e., single-home), we find that targeting softens the competition over consumers when we allow consumers to have multiple subscriptions (i.e., multi-home). This might imply that equilibrium profits are higher with targeting than without. The second chap ter studies the competitive effects of cross-licensing contracts between digital platforms. In one-sided markets, cross-licensing has potential anti-competitive effects. I find in a two-sided model that positive network effects might alleviate the anti-competitive effects of cross-licensing, and even flip the outcome. The third chapter studies the incentives of dominant suppliers to commit to uniform pricing in wholesale markets when inside options induce size-based wholesale price discrimination in favour of the large retailer. Seminal lit erature has provided clear-cut results. In a model with endogenous inside options, we show that the outcome is ambiguous when we allow retailers to be differentiated. The fourth and final chapter presents two classroom experiments on technology licensing, which has been applied to teach central concepts of economics to business students. The classroom experiments stimulate discussions of, among others, technology licensing and intellectual property rights.