Digitalization in Two-Sided Platform

Filomena Garcia and Muxin Li ()

No 146, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: In this paper we study the effects of the introduction of a new two sided platform endowed with artificial intelligence in a market where a firm provides a brick and mortar platform to buyers and sellers. In our theoretical model we show that the decision of whether to introduce the new platform depends on the reduction of the search cost for the consumers. We also show that the introduction of the platform enlarges the market with more consumers using both platforms. Finally we study the welfare effect of the introduction of the platform opening the discussion on whether certain artificial intelligence devices for shopping should be regulated.

Keywords: e-Commerce; Intermediary; Two-sided markets (search for similar items in EconPapers)
JEL-codes: L1 L2 L8 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2020-04, Revised 2020-04
New Economics Papers: this item is included in nep-big, nep-com, nep-ict, nep-ind, nep-mic, nep-ore and nep-pay
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0146

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