Competition in two-sided markets Armstrong, Mark
The Rand journal of economics,
10/2006, Letnik:
37, Številka:
3
Journal Article
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Many markets involve two groups of agents who interact via "platforms," where one group's benefit from joining a platform depends on the size of the other group that joins the platform. I present ...three models of such markets: a monopoly platform; a model of competing platforms where agents join a single platform; and a model of "competitive bottlenecks" where one group joins all platforms. The determinants of equilibrium prices are (i) the magnitude of the cross-group externalities, (ii) whether fees are levied on a lump-sum or per-transaction basis, and (iii) whether agents join one platform or several platforms.
In this study, a new market model is proposed to enable the smooth integration of distributed energy resources (DERs) in day-ahead (DA) and balancing (BL) markets. The DA market is a joint energy and ...reserve market. DERs participate in the local market operated by the distribution market operator (DMO) which is coordinated with the wholesale market. During local market clearing, the DMO considers the technical constraints of the distribution grid to keep the operation of the distribution grid within limits. Moreover, the DMO, through preliminary scheduling, estimates preliminary prices for energy, reserve and balancing services. These can be seen as offer prices by which the DMO will bid into the TMO DA and BL market. The uncertainty of renewable-based DERs is considered through the use of stochastic programming. The proposed market model is compared with a centralised market model. Results show that adding the distribution network constraints to the proposed market model is capable of alleviating overloading and appropriately accounting this effect in terms of increasing the operational cost. Moreover, it has been shown that the scalability of the proposed market model is higher compared to the currently applied centralised market models.
In this paper, we examine asymmetric volatility spillovers between oil and international stock markets in a vector autoregression framework using a directed acyclic graph (DAG) technique. We provide ...evidence that bad total volatility spillovers dominate the system and change over time, suggesting that a pessimistic mood and uninformed traders who tend to increase volatility dominate in markets. Positive spillovers of oil markets dominated from 2006 to mid-2009, but reversed after mid-2009. Moreover, the spillovers from good volatilities in oil markets to bad volatilities in global stock markets were significantly positive during the economic recovery period. The recent, important economic and political events have influenced asymmetries in volatility spillovers.
•Bad total volatility spillovers dominate the system and change over time.•Positive spillovers of oil markets dominated from 2006 to mid-2009, but reversed after mid-2009.•Spillovers from good volatilities in the oil market to bad volatilities in global stock markets are significantly positive after mid-2009.•Recent, important economic and political events have influenced asymmetries in volatility spillovers.
•Market innovation research studies how markets are created and transformed.•Bibliometric mapping reveals six research streams within market innovation research.•Interpretative analysis produces rich ...descriptions for the six research streams.•The literature shows shifts toward emergence, distributed agency and non-linearity.•The article uses complexity theory to outline future research directions.
Over the past three decades, a rapidly expanding academic literature has investigated how new markets are created and how existing markets are transformed, phenomena this article refers to as “market innovation”. The literature on market innovation is currently fragmented and characterized by heterogeneity of terminology, theoretical paradigms, and empirical research settings. The purpose of this article is to map the field, identify distinct research clusters, and uncover shifts in the literature’s underpinning conceptual perspectives. Specifically, using bibliometric mapping, the article identifies six clusters of market innovation research. Further analysis reveals three major shifts in the literature over time: (1) a shift from reductionism to emergence, (2) a shift from central agency to distributed agency, and (3) a shift from linearity to non-linearity. To advance the understanding of all three shifts and move theory development forward, complexity theory offers a valuable meta-theoretical framework. Future research directions are derived from complexity theory.
This study estimates the benefits that Indian farmers derive from market and weather information delivered to their mobile phones by a commercial service called Reuters Market Light (RML). We conduct ...a controlled randomized experiment in 100 villages of Maharashtra. Treated farmers associate RML information with a number of decisions they have made, and we find some evidence that treatment affected spatial arbitrage and crop grading. But the magnitude of these effects is small. We find no statistically significant average effect of treatment on the price received by farmers, crop value-added, crop losses resulting from rainstorms, or the likelihood of changing crop varieties and cultivation practices. Although disappointing, these results are in line with the market take-up rate of the RML service in the study districts, which shows small numbers of clients in aggregate and a relative stagnation in take-up over the study period.
Using a unique high-frequency futures dataset, we characterize the response of U.S., German and British stock, bond and foreign exchange markets to real-time U.S. macroeconomic news. We find that ...news produces conditional mean jumps; hence high-frequency stock, bond and exchange rate dynamics are linked to fundamentals. Equity markets, moreover, react differently to news depending on the stage of the business cycle, which explains the low correlation between stock and bond returns when averaged over the cycle. Hence our results qualify earlier work suggesting that bond markets react most strongly to macroeconomic news; in particular, when conditioning on the state of the economy, the equity and foreign exchange markets appear equally responsive. Finally, we also document important contemporaneous links across all markets and countries, even after controlling for the effects of macroeconomic news.
An integrated approach to the economics of sovereign default Fiscal crises and sovereign default repeatedly threaten the stability and growth of economies around the world. Mark Aguiar and Manuel ...Amador provide a unified and tractable theoretical framework that elucidates the key economics behind sovereign debt markets, shedding light on the frictions and inefficiencies that prevent the smooth functioning of these markets, and proposing sensible approaches to sovereign debt management. The Economics of Sovereign Debt and Default looks at the core friction unique to sovereign debt—the lack of strong legal enforcement—and goes on to examine additional frictions such as deadweight costs of default, vulnerability to runs, the incentive to "dilute" existing creditors, and sovereign debt's distortion of investment and growth. The book uses the tractable framework to isolate how each additional friction affects the equilibrium outcome, and illustrates its counterpart using state- of-the-art computational modeling. The novel approach presented here contrasts the outcome of a constrained efficient allocation—one chosen to maximize the joint surplus of creditors and government—with the competitive equilibrium outcome. This allows for a clear analysis of the extent to which equilibrium prices efficiently guide the government's debt and default decisions, and of what drives divergences with the efficient outcome.Providing an integrated approach to sovereign debt and default, this incisive and authoritative book is an ideal resource for researchers and graduate students interested in this important topic.
Over the past three decades, economic sociology has been revealing how culture shapes economic life even while economic facts affect social relationships. This work has transformed the field into a ...flourishing and increasingly influential discipline. No one has played a greater role in this development than Viviana Zelizer, one of the world's leading sociologists.Economic Livessynthesizes and extends her most important work to date, demonstrating the full breadth and range of her field-defining contributions in a single volume for the first time.
Economic Livesshows how shared cultural understandings and interpersonal relations shape everyday economic activities. Far from being simple responses to narrow individual incentives and preferences, economic actions emerge, persist, and are transformed by our relations to others. Distilling three decades of research, the book offers a distinctive vision of economic activity that brings out the hidden meanings and social actions behind the supposedly impersonal worlds of production, consumption, and asset transfer.Economic Livesranges broadly from life insurance marketing, corporate ethics, household budgets, and migrant remittances to caring labor, workplace romance, baby markets, and payments for sex. These examples demonstrate an alternative approach to explaining how we manage economic activity--as well as a different way of understanding why conventional economic theory has proved incapable of predicting or responding to recent economic crises.
Providing an important perspective on the recent past and possible futures of a growing field,Economic Livespromises to be widely read and discussed.
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