DIGITAL PLATFORMS AND COLLUSION: A DYNAMIC MODEL OF TWO-SIDED MARKETS
DOI:
https://doi.org/10.56238/arev7n12-086Keywords:
Digital Platforms, Collusion, Two-Sided Market, Competition and AlgorithmsAbstract
Considering the advancement of digital technologies and the growing use of algorithms capable of influencing business strategies, it becomes relevant to understand how digital platforms can foster collusive practices in two-sided markets, where cross-side externalities shape competitive incentives. The objective is to analyze how these platforms sustain collusive agreements and how such dynamics affect prices, competition, and consumer welfare. To this end, a review of collusion theory is conducted, along with an examination of the dynamic model by Lefouili and Pinho (2020), which evaluates repeated interactions between platforms under different intensities of externalities, comparing scenarios of bilateral and unilateral collusion. The results show that strong externalities can stabilize collusion, enabling higher prices and reduced rivalry. This leads to the conclusion that digital platforms, by exploiting network effects and monitoring algorithms, present a greater risk of tacit coordination, reinforcing the need to update regulatory instruments and antitrust policies suited to the digital environment.
Downloads
References
Armstrong, M. (2006). Competition in two‐sided markets. The RAND Journal of Economics, 37(3), 668-691. DOI: https://doi.org/10.1111/j.1756-2171.2006.tb00037.x
Belleflamme, P., y Peitz, M. (2010). Industrial Organization: Markets and Strategies. Cambridge University Press. DOI: https://doi.org/10.1017/CBO9780511757808
Cai, H., & Zhang, L. (2016). A dynamic analysis of two-sided markets and competition. Journal of Economic Theory, 164, 135-155.
CEPAL (2021). Tecnologías digitales para un nuevo futuro. Desarrollo productivo y empresarial, CEPAL 1-92. https://www.cepal.org/es/publicaciones/46816-tecnologias-digitales-un-nuevo-futuro
Corts, K. (2020). Platforms and the dynamics of competition. Journal of Economics & Management Strategy, 29(2), 315-332.
Da Silva, F. y Núñez, G. (2021). La era de las plataformas digitales y el desarrollo de los mercados de datos en un contexto de libre competencia. Desarrollo productivo y empresarial, CEPAL 1-54. https://www.cepal.org/es/publicaciones/47540-la-era-plataformas-digitales-desarrollo-mercados-datos-un-contexto-libre
Dewenter, R., Haucap, J., y Wenzel, T. (2011). Indirect network effects with two-sided platforms: The case of media markets. Journal of Media Economics, 24(1), 19-31. DOI: https://doi.org/10.1016/j.irle.2011.02.001
Fugellie, R. L., González, F., & Maturana, T. (2021). Colusión: Análisis económico y principales variables de competencia. Libre competencia. Obtenido de https://librecompetencia.uc.cl/images/AAA/EPP/EPP_5_-_Mayo.pdf
Huerta, F. (enero de 2016). Regulación y colusión. Teoría y realidad. Obtenido de Instituto de Economía y Empresa: https://www.iee.edu.pe/doc/publicaciones/articulos/26--2016_01-Regulacion_y_Colusion-IEE.pdf
Lefouili, Y., y Pinho, J. (2020). Collusion in two-sided markets. GEE Papers, 147.
Mas Colell, A., M.D. Whinston y J. Green, 1995, Microeconomic Theory, New York, Oxford University Press.
Montenegro, A. (1990). Algunas ilustraciones sobre la Teoría de Juegos. Revista de desarrollo y Sociedad, 1(26), 103-116. Obtenido de https://doi.org/10.13043/dys.26.5 DOI: https://doi.org/10.13043/dys.26.5
Montero, D. et al. (2021). Colusión y algoritmos: nuevos desafíos. Antitrust position papers, (4), 3-13. https://librecompetencia.uc.cl/images/AAA/APP/APP_4.pdf
Parker, G. y Van Alstyne, M. (2018). Innovation, open source, and platform dynamics. Management Science, 64(7), 3015-3033. DOI: https://doi.org/10.1287/mnsc.2017.2757
Rochet, J., y Tirole, J. (2003). Platform competition in two-sided markets. Journal of the European Economic Association, 1(4), 990-1029. DOI: https://doi.org/10.1162/154247603322493212
Tirole, J. (1988). The Theory of Industrial Organization. The MIT Press.
Van Alstyne, M., Parker, G., y Choudary, S. (2016). Platform revolution: How networked markets are transforming the economy. Norton & Company.
Viecens, M. F. (2023). Algoritmos y colusión: ¿qué hemos aprendido? Un análisis para América Latina. Revista Latinoamericana de Economía y Sociedad Digital. Obtenido de https://revistalatam.digital/wp-content/uploads/2024/02/Maria-Fernanda-Viecens_Algoritmos-y-colusion.pdf DOI: https://doi.org/10.53857/RLESD.04.2023.01
Wright, J., & Stone, T. (2017). Innovation, antitrust, and platform competition: A case for regulatory humility. George Mason Law Review, 24(5), 1257-1279
