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Digitalization in Two-Sided Platform

Author

Listed:
  • Filomena Garcia
  • Muxin Li

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.

Suggested Citation

  • Filomena Garcia & Muxin Li, 2020. "Digitalization in Two-Sided Platform," GEE Papers 0146, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Apr 2020.
    • Handle: RePEc:mde:wpaper:0146
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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_146.pdf
    File Function: First version, 2020
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    Citations

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    Cited by:

    1. Kaur, Puneet & Talwar, Shalini & Islam, Nazrul & Salo, Jari & Dhir, Amandeep, 2022. "The effect of the valence of forgiveness to service recovery strategies and service outcomes in food delivery apps," Journal of Business Research, Elsevier, vol. 147(C), pages 142-157.
    2. Talwar, Shalini & Dhir, Amandeep & Scuotto, Veronica & Kaur, Puneet, 2021. "Barriers and paradoxical recommendation behaviour in online to offline (O2O) services. A convergent mixed-method study," Journal of Business Research, Elsevier, vol. 131(C), pages 25-39.

    More about this item

    Keywords

    e-Commerce; Intermediary; Two-sided markets;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L8 - Industrial Organization - - Industry Studies: Services

    NEP fields

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