An Economic Perspective on Data and Platform Market Power

Martens, Bertin

doi:10.2139/ssrn.3783297

Cited by 6 publications

(3 citation statements)

References 36 publications

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“…Economic characteristics of data that distinguish them from ordinary goods and services, including non-excludability and non-rivalry, economies of scope in data re-use and aggregation, the social value of data and their role in generating network effects. Martens (2021) pointed out that data-driven network effects may result in monopolistic market power of platforms which they can use for their own benefit, at the expense of users. Any policy intervention that seeks to address the market power of online platforms requires careful balancing between these two poles.…”

Section: Literature Reviewmentioning

confidence: 99%

How to Share Information with Third Parties while Protecting User Privacy on Internet Platform

tian

2023

Preprint

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Internet have radically transformed how people live their lives, especially in the COVID-19 pandemic. People rely on various Internet platforms in daily life, such as e-commerce platforms, social media platforms, etc. With the time going, Internet platforms have accumulated more and more personal information about their users or customers. In order to improve user experience and increase their profits, Internet platforms are willing to open their interfaces to third parties and share users’ information with them. Internet platform gains revenue by providing services for users, the users get utility by Internet platform. At the same times, the third parties enhance users experience by providing diversity services, and gain revenue and users' data. However, such kind of sharing may infringe users’ privacy and then erode users’ trust, especially for those users with higher privacy concerns. This paper tries to find out how Internet platforms can walk a fine line between sharing users’ information and protecting their privacy. Firstly, we analysis the cost-benefit of stakeholders. Then, we propose a pyramid model that captures the interaction between the users, Internet platform, and third parties. Specifically, we focus on the influence of user privacy sensitivity on information sharing behavior of Internet platform. We construct a three-stage dynamic game model with complete information to obtain the threshold value of third parties under the equilibrium state. The result shows that unrestrained sharing of user’ information with third parties will bring negative effects for Internet platforms and finally reduce their profits. The most advantageous way is to develop differentiated privacy policies for users with different privacy preferences. Those users with higher privacy concerns can pay some membership fee to enjoy the service provided by an Internet platform without the disturbance from various third parties.

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Section: Literature Reviewmentioning

confidence: 99%

How to Share Information with Third Parties while Protecting User Privacy on Internet Platform

tian

2023

Preprint

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“…To the extent that the merged datasets are complementary and non-overlapping, the insights that can be obtained from the merged set, or the value of these insights, is greater than the sum of insights obtained from the separate datasets. In other words, keeping complementary datasets in separate silos entails a loss of knowledge or insights that can be extracted from the data (Martens, 2020). This additional value is called economies of scope in data aggregation.…”

Section: The Potential Economic Implications Of the Nev Databasementioning

confidence: 99%

“…We argue that there are significant economic benefits in this NEV data sharing regime in terms of accelerating the pace of innovation in the electric vehicle industry, stemming from economies of scope in data aggregation or data pooling. This implies that more insights can be extracted from pooling of complementary datasets compared to keeping them in separate data silos (Martens, 2020). As a result, the social value of pooled data is higher than the sum of private values of segmented data.…”

Section: Introductionmentioning

confidence: 99%

Data access and regime competition: A case study of car data sharing in China

Martens

Zhao

2021

Big Data & Society

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We study the case of a Chinese industrial policy, implemented in Shanghai that makes it mandatory for car manufacturers to share electro-mechanical performance and real time navigation data from their entire fleet of electric and hybrid vehicles with local and central government authorities. This policy seeks to prevent fraud in state subsidies, reduce emissions, assess the performance of New Energy Vehicles and strengthen the competitiveness of Chinese manufacturers of these vehicles. We argue that economies of scope in data aggregation may provide traditional market failure arguments in favor of government intervention and mandatory data pooling. Our paper illustrates how data access regimes could be used for economic competition. The EU and China pursue similar data sharing and pooling policy goals that hinge on economies of scope in data aggregation. However, they follow very different political processes to achieve these goals.

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Data and statecraft: why and how states localize data

Han

2024

Bus. Polit.

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This paper explores the motives and mechanisms behind data localization implemented by states to protect data, which is essential to emerging technologies such as Artificial Intelligence. Despite the significant negative aspects of data localization for states, the practice has become increasingly prevalent, leading to the unexplored question of why states choose to implement it. This suggests that data localization is a form of economic means derived from digital technologies and employed by states to serve political objectives. Focusing on the data in platforms, the theoretical mechanism of data localization is captured in light of two factors: network perception and security externality. Network perception pertains to a state’s perception of the positive network effect generated by platforms, while security externality refers to a state’s consideration of the security implications in relation to the economic benefits derived from the positive network effect, serving the national interest in domestic and/or international contexts. To substantiate these theoretical propositions, the paper employs a comparative case study approach where Vietnam, Singapore, and Indonesia have been chosen as empirical cases based on the selection strategy. The paper bridges the concept of economic statecraft with digital technologies, fosters interdisciplinary discussions, and offers policy implications.

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An Economic Perspective on Data and Platform Market Power

Cited by 6 publications

References 36 publications

How to Share Information with Third Parties while Protecting User Privacy on Internet Platform

How to Share Information with Third Parties while Protecting User Privacy on Internet Platform

Data access and regime competition: A case study of car data sharing in China

Data and statecraft: why and how states localize data

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