Economics of Digital Ecosystems: Private and Public Regulation – EDECOSYSTEM

Digital ecosystems significantly impact modern economies by introducing new business opportunities and disrupting traditional industries. Policymakers are concerned with the power of these ecosystems due to their effects on competition, innovation, and consumer welfare. While the strategic management literature has explored ecosystems, the economic literature has offered limited contributions. This research proposal aims to bridge this gap. It includes three parts:
Coordination, Pricing, and Business Models: This part of the research will delve into the organization of ecosystems, studying pricing and business models. It will extend the two-sided market theory to analyze ecosystems composed of many sides, accounting for the positions of each good in the ecosystem as well as complementarities. It will also explore the coordination of services with heterogeneous business models. An application to Mobile app stores will be performed.
Data Sharing and Information: Data's role in ecosystems and its exchange are crucial. This part of the research will look at incentives to collect and share data, examining new theories of harm and regulation, and determining when data is anticompetitive or efficiency-enhancing. It will also investigate the strategic incentives to distort recommendations to users, for instance by self-preferencing or favoring popular products.
Innovation and Expansion: Ecosystems are designed to foster innovation, with a focus on the optimal inclusion of new services. This part of the research will examine how the presence of few major actors affects the risk of market dominance and distorts innovators’ incentives. This will involve studying the strategic choice of a perimeter but also the incentives of the innovators.
In summary, the proposal seeks to enhance our understanding of digital ecosystems' economic aspects, particularly concerning platforms and data, and their impact on competition, innovation, and consumer welfare.