Location
Hilton Hawaiian Village, Honolulu, Hawaii
Event Website
https://hicss.hawaii.edu/
Start Date
3-1-2024 12:00 AM
End Date
6-1-2024 12:00 AM
Description
This paper develops a Salop differentiation model to study private and social incentives to share information within a platform ecosystem, between a platform intermediary and its business users. Information sharing can help business users to make more efficient decisions around their market and product innovation strategies improving social welfare. However, private and social incentives for information sharing do not coincide when the platform intermediary is vertically integrated and competes directly with its business users in the upstream market of the platform market. So, there is a scope for an \emph{ex-ante} regulation of mandatory data sharing. We argue that the location of data access matters and propose a regulatory framework that introduces a new data right for platform users, the \emph{in-situ} data right, which is associated with positive welfare gains. By construction, this right enables effective information sharing, together with its context, without reducing the value created by network effects. We discuss crucial elements of its implementation in order to achieve innovation-friendly and competitive digital markets.
Recommended Citation
Martens, Bertin; Parker, Geoffrey; Petropoulos, Georgios; and Van Alstyne, Marshall, "Towards Efficient Information Sharing in Network Markets" (2024). Hawaii International Conference on System Sciences 2024 (HICSS-57). 6.
https://aisel.aisnet.org/hicss-57/in/data_ecosystems/6
Towards Efficient Information Sharing in Network Markets
Hilton Hawaiian Village, Honolulu, Hawaii
This paper develops a Salop differentiation model to study private and social incentives to share information within a platform ecosystem, between a platform intermediary and its business users. Information sharing can help business users to make more efficient decisions around their market and product innovation strategies improving social welfare. However, private and social incentives for information sharing do not coincide when the platform intermediary is vertically integrated and competes directly with its business users in the upstream market of the platform market. So, there is a scope for an \emph{ex-ante} regulation of mandatory data sharing. We argue that the location of data access matters and propose a regulatory framework that introduces a new data right for platform users, the \emph{in-situ} data right, which is associated with positive welfare gains. By construction, this right enables effective information sharing, together with its context, without reducing the value created by network effects. We discuss crucial elements of its implementation in order to achieve innovation-friendly and competitive digital markets.
https://aisel.aisnet.org/hicss-57/in/data_ecosystems/6