This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No 853123)
Digital platforms, such as Amazon, Alibaba, and Google, have become important global players. Their practices have drawn significant anti-trust and regulatory scrutiny and critical interventions. However, existing theoretical models in the literature are mostly unsuitable for the analysis of most digital platforms, because they fail to capture the important aspects and dynamics of the digital economy.
DIPVAR aims to support effective competition policy and regulation for digital markets and, thus, greatly improve consumer welfare in the European Union as well as other parts of the world. To achieve this, DIPVAR will first develop tractable and applicable models of markets with digital platforms to capture their unique features. Second, to inform antitrust and regulation policies, the project will investigate the effects of dominant platforms’ practices on prices, variety, and quality provision for buyers, small rivals, and platform entry. This analysis will highlight under which conditions we would have potentially harmful distortions in these valuable markets, which tools and types of interventions might mitigate these distortions, and when regulators should be more lenient towards business practices of digital platforms.