IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04473840.html
   My bibliography  Save this paper

The Cooperation Paradox

Author

Listed:
  • Eric K Clemons

    (University of Pennsylvania)

  • Maximilian Schreieck

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université, TUM - Technische Universität Munchen - Technical University Munich - Université Technique de Munich)

  • Sebastian Hermes

    (TUM - Technische Universität Munchen - Technical University Munich - Université Technique de Munich)

  • Frantz Rowe

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université, SKEMA Business School)

  • Helmut Krcmar

    (TUM - Technische Universität Munchen - Technical University Munich - Université Technique de Munich)

Abstract

Dominant American online platforms like Amazon Alexa or Google Assistant have become Life Control Interfaces (LCIs), which facilitate consumers' online interactions and influence what consumers do and do not see and buy. These platforms operate outside of EU regulation, and create significant costs for traditional European firms in a wide range of industries. These platforms can reduce firms' access to customers, can charge for enabling access to customers, or can charge for access to essential data on firms' customers. Since these platforms enjoy monopoly power there is little restraint on their charges, which indirectly increase consumers' prices. We propose that regulators encourage the formation of a consortium to offer a single integrated EU-based Life Control Interface (EuLCI). This consortium would increase the number of EuLCIs from zero to one, and thus would actually increase consumer choice. We call cooperation that enhances rather than limits choice The Cooperation Paradox.

Suggested Citation

  • Eric K Clemons & Maximilian Schreieck & Sebastian Hermes & Frantz Rowe & Helmut Krcmar, 2022. "The Cooperation Paradox," Post-Print hal-04473840, HAL.
    • Handle: RePEc:hal:journl:hal-04473840
    DOI: 10.1007/s12525-022-00534-2
    Note: View the original document on HAL open archive server: https://hal.science/hal-04473840
    as

    Download full text from publisher

    File URL: https://hal.science/hal-04473840/document
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s12525-022-00534-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adam D. Thierer, 1994. "Unnatural Monopoly: Critical Moments in the Development of the Bell System Monopoly," Cato Journal, Cato Journal, Cato Institute, vol. 14(2), pages 267-285, Fall.
    2. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    3. Caillaud, Bernard & Jullien, Bruno, 2003. "Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    4. Baumol, William J & Panzar, John C & Willig, Robert D, 1983. "Contestable Markets: An Uprising in the Theory of Industry Structure: Reply," American Economic Review, American Economic Association, vol. 73(3), pages 491-496, June.
    5. Marc Bourreau & Bernard Caillaud & Romain De Nijs, 2018. "Taxation of a digital monopoly platform," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(1), pages 40-51, February.
    6. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    7. Damien NEVEN & Paul SEABRIGHT, 1995. "European Industrial Policy: The Airbus Case," Cahiers de Recherches Economiques du Département d'économie 9509, Université de Lausanne, Faculté des HEC, Département d’économie.
    8. Tobias Pauli & Erwin Fielt & Martin Matzner, 2021. "Digital Industrial Platforms," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 63(2), pages 181-190, April.
    9. Evans David S. & Schmalensee Richard, 2010. "Failure to Launch: Critical Mass in Platform Businesses," Review of Network Economics, De Gruyter, vol. 9(4), pages 1-28, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric K. Clemons & Maximilian Schreieck & Sebastian Hermes & Frantz Rowe & Helmut Krcmar, 2022. "The Cooperation Paradox," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 459-471, June.
    2. Vincenzo Vignieri, 2021. "Crowdsourcing as a mode of open innovation: Exploring drivers of success of a multisided platform through system dynamics modelling," Systems Research and Behavioral Science, Wiley Blackwell, vol. 38(1), pages 108-124, January.
    3. Jullien, Bruno & Pavan, Alessandro & Rysman, Marc, 2021. "Two-sided Markets, Pricing, and Network Effects," TSE Working Papers 21-1238, Toulouse School of Economics (TSE).
    4. Przemyslaw Rys & Maciej Sobolewski, 2020. "Two-sided platforms: dynamic pricing and multiple equilibria," JRC Working Papers on Digital Economy 2020-14, Joint Research Centre.
    5. Rong, Ke & Sun, Hui & Li, Dun & Zhou, Di, 2021. "Matching as Service Provision of Sharing Economy Platforms: An Information Processing Perspective," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    6. Andreas Hein & Maximilian Schreieck & Tobias Riasanow & David Soto Setzke & Manuel Wiesche & Markus Böhm & Helmut Krcmar, 2020. "Digital platform ecosystems," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(1), pages 87-98, March.
    7. Patrick Loux & Mathilde Aubry & Sébastien Tran & Emmanuel Baudoin, 2020. "Multi-sided platforms in B2B contexts : the role of affiliation costs and interdependencies in adoption decisions," Post-Print hal-02376313, HAL.
    8. Jordana VIOTTO, 2015. "Competition and Regulation of Crowdfunding Platforms: A Two-sided Market Approach," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(99), pages 33-50, 3rd quart.
    9. Jørgen Veisdal, 2020. "The dynamics of entry for digital platforms in two-sided markets: a multi-case study," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(3), pages 539-556, September.
    10. Sangita Poddar & Tanmoyee Banerjee(Chatterjee) & Swapnendu Banerjee, 2023. "Taxation on duopoly e-commerce platforms and their search environments," SN Business & Economics, Springer, vol. 3(8), pages 1-20, August.
    11. Hagiu, Andrei & Hałaburda, Hanna, 2014. "Information and two-sided platform profits," International Journal of Industrial Organization, Elsevier, vol. 34(C), pages 25-35.
    12. Juan Manuel Sanchez‐Cartas & Gonzalo León, 2021. "Multisided Platforms And Markets: A Survey Of The Theoretical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(2), pages 452-487, April.
    13. Geng, Yang & Zhang, Yulin, 2020. "Platform launch in two-sided markets and users’ expectations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 558(C).
    14. Shahzad (Shaz) Ansari & Raghu Garud & Arun Kumaraswamy, 2016. "The disruptor's dilemma: TiVo and the U.S. television ecosystem," Strategic Management Journal, Wiley Blackwell, vol. 37(9), pages 1829-1853, September.
    15. Veile, Johannes W. & Schmidt, Marie-Christin & Voigt, Kai-Ingo, 2022. "Toward a new era of cooperation: How industrial digital platforms transform business models in Industry 4.0," Journal of Business Research, Elsevier, vol. 143(C), pages 387-405.
    16. Nishikawa, Bruna T. & Orsato, Renato J., 2021. "Professional services in the age of platforms: Towards an analytical framework," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    17. Huayong Du & Ying Teng & Zhenzhong Ma & Xuguang Guo, 2022. "Value Creation in Platform Enterprises: A Fuzzy-Set Qualitative Comparative Analysis," Sustainability, MDPI, vol. 14(9), pages 1-21, April.
    18. David S. Evans & Richard Schmalensee, 2013. "The Antitrust Analysis of Multi-Sided Platform Businesses," NBER Working Papers 18783, National Bureau of Economic Research, Inc.
    19. Estelle Malavolti, 2016. "Single Till or Dual Till at airports: a Two-Sided Market Analysis," Post-Print hal-01406372, HAL.
    20. Lam, W., 2015. "Switching Costs in Two-sided Markets," LIDAM Discussion Papers CORE 2015024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item

    Keywords

    Life control interfaces; Online competition; Online cooperation and consortia; Online gateways; Online monopoly regulation; Online platform regulation JEL classification D40;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04473840. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.