A multi-sided market of personal data resource allocation: An empirical study of China’s car-hailing platform

The current rapid development of online car-hailing services creates a serious challenge to the existing paradigm of market governance and antitrust policy. However, the debate on the market structure of the car-hailing platform requires more empirical evidence to uncover its functions. This research adopts an interdisciplinary methodology based on computer science and economics, and including software reverse engineering tools applied to the interoperability of the terminal application and resource allocation model, to demonstrate the topological market structure of personal data resources allocation in China’s car-hailing industry. Within the discussion of the hybrid nature of technology and economy, the analysis results clearly show that China’s car-hailing platform services present a multi-sided market structure when seen from the perspective of personal data resource allocation. Personal data resource (PDR), that is considered an essential market resource, is applied as an asset transferred unhindered between platforms via the application programming interface, and thus, creating a new market allocation mechanism. The connection between the car-hailing platforms and social media platforms is an essential aspect of the market competition in the domain. As applications of online platforms increase in the global context, this research offers a new perspective in personal data resource allocation with implications for the governance of the platform economy.

Prioritizing the influencing factors of utaut-2 model toward mobile network service providers

Technological developments have a major impact on user behavior. The rapidly evolving communication system and technology have provided numerous choices for people. The ever-shifting changes in the generation of communication networks have posed challenges for mobile network service providers to attract and retain customers. This study aims to prioritize the determinants of the adoption of mobile network service providers using the unified theory of acceptance and use of technology (UTAUT-2). In this study, data were collected from 660 mobile phone users in Haryana, India. A fuzzy analytical hierarchy process (F-AHP) was applied to arrange the priority or rank the factors based on the significance of the factors in explaining the adoption of mobile network service providers. Results of the study reveal that efforts expectancy is the highest-ranked and prioritized factor for the adoption of mobile network service providers followed by performance expectancy and facilitating conditions. However, social influence emerged as the least important factor. The present study provides theoretical implications for future researchers by synthesizing and prioritizing the important factors affecting technology acceptance. The practical implications offer a clearer insight to marketers for developing focused pragmatic strategies to retain customer loyalty. The study has considered only UTAUT-2 model constructs and used the F-AHP technique. Other factors may be considered in future studies. Other priority analysis techniques can also be used such as ISM and MICMAC analysis for further study. The research has been conducted in Haryana, India, and therefore, it needs to be tested in other areas/countries for generalizability. JEL Classification: O1, O2, O4

Evaluating the efficiency of Mediterranean container ports using data envelopment analysis

Mediterranean container ports are constantly requested to face new market challenges after years of decline of their traffic in favour of a stronger leadership of Northern range ports, also favoured by the consolidation of the Arctic Route and the Belt and Road Initiative. To regain competitiveness, Mediterranean ports must undertake a path of operational, managerial and infrastructural strengthening. This study applies Data Envelopment Analysis (DEA) to 35 Mediterranean container ports in order to identify the potential key success factors on which to intervene to improve their competitiveness potential and response to the new market needs. The application uses the port throughput as output, and three inputs: yard area, number of quay cranes and distance of the port from the Suez–Gibraltar axis. The latter has been inserted in the study to evaluate whether it can affect port efficiency. Both input- and output-oriented approaches are used in order to investigate the port competitiveness through the production function (input-oriented), and the port commercial competitiveness based on the output and feasibility of its production (output-oriented). Results can provide insights for the implementation of future policies and management strategies aimed to strengthen the Mediterranean port context.

Regulating digital platforms as the new network industries

The most solid framework to both analyze and regulate digital platforms is the one which has developed over the past century for the conceptualization and the regulation of the traditional network industries such as telecoms, transport and energy. Digital platforms in multi-sided markets can be considered the new network industries, notably due to the relevance of direct, indirect and algorithmic network effects. As a result, platforms display features which are similar to all industries where network effects are key, namely concentration, market power and subsequently political intervention. Regulatory measures that have already been tested in the traditional network industries can be exported to the new network industries, including regulation to promote competition by reducing barriers to entry, regulation to promote interoperability and structural remedies along with public service obligations imposed on platforms. Examples of this approach can be identified in different initiatives around the world, with the European Union in the lead.

Does regulation induce cost efficiency in electricity distribution utilities? Use of stochastic cost frontier analysis for the Indian states

To overcome the macroeconomic crisis of the early 1990s, the Government of India persuaded the state governments to adopt market-oriented reforms for loss-making state public sector undertakings in general and power sector utilities in particular with an aim to limit the overall size of the public sector. This led the state governments to undertake unbundling of their vertically integrated State Electricity Boards (SEBs), establish independent regulatory bodies in the form of State Electricity Regulatory Commissions (SERCs) to regulate the power sector, and allow for an active participation of private sector. Given this backdrop, the present study attempts to examine the effect of establishment of SERCs on the cost-efficiency of electricity distribution in the Indian states. Thereby, it evaluates whether the establishment of SERCs has induced efficiency gains in the electricity distribution. Estimating a Cobb-Douglas stochastic cost frontier function, it finds that the establishment of independent regulators in various states has resulted in significant improvements in the cost-efficiency in the electricity distribution.

Which access to which assets for an effective liberalization of the railway sector?

In the European rail industry, to enable competition in the market, entrants should be granted access to a large set of complementary services, beyond access to the tracks. For an efficient and effective entry, temporary access to quasi-essential complementary assets like rolling stock, mechanical maintenance workshops, data, schedules, etc. is required. In the liberalized rail sector, several observed anticompetitive practices involve distorted access to these quasiessential facilities. Therefore, competition agencies must deal with litigation between the incumbent and new entrants. Most cases have been settled, resulting in commitments from the incumbent. We argue that such transitory and case-by-case remedies fail to produce favorable conditions for a secure and efficient entry. Thus, we propose to systematize such remedies through asymmetric and enduring ex-ante regulation.

Entitlement problems in digital markets and how antitrust shapes the appropriation of network externalities

The engine of value creation in the digital economy is network externalities, i.e. the phenomenon by which the value to a new user from adopting a good or service increases in the number of users who already adopted it. But network externalities are not manna from heaven. They are ‘sponsored’ by firms who make demand expanding investments. In areas with imperfect property institutions like the digital economy, a key business decision for profit maximizing firms consists in devising value capture strategies to appropriate their investments. This paper identifies three recurrent types of appropriation disputes in digital markets: Access to software platforms, limitations to the exploitation of raw data and claims over digital content. At the heart of each dispute lies the controversial exercise of an entitlement over a digital asset that is embedded in a context of or exhibits itself network externalities. The appropriation of this asset and its integration into the firm’s ecosystem could make the firm benefit from network efficiencies. Controlling the digital asset in question becomes a proxy. Appropriation strategies by proxy can have pro- and anti-competitive effects. This is why each dispute can not only be understood as a problem of appropriability, but also as a problem of potential harm to competition. And indeed, competition enforcers have brought forward various cases with underlying appropriation disputes. This paper tracks the influence of three of them on the appropriability of assets in the digital economy, and on digital firms’ strategies to capture the value of network externalities.

Data-driven sector coupling in 5G-based smart networks

5G attains the role of a GPT for an open set of downstream IoT applications in various network industries and within the app economy more generally. Traditionally, sector coupling has been a rather narrow concept focusing on the horizontal synergies of urban system integration in terms of transport, energy, and waste systems, or else the creation of new intermodal markets. The transition toward 5G has fundamentally changed the framing of sector coupling in network industries by underscoring the relevance of differentiating between horizontal and vertical sector coupling. Due to the fixed mobile convergence and the large open set of complementary use cases, 5G has taken on the characteristics of a generalized purpose technology (GPT) in its role as the enabler of a large variety of smart network applications. Due to this vertical relationship, characterized by pervasiveness and innovational complementarities between upstream 5G networks and downstream application sectors, vertical sector coupling between the provider of an upstream GPT and different downstream application industries has acquired particular relevance. In contrast to horizontal sector coupling among different application sectors, the driver of vertical sector coupling is that each of the heterogeneous application sectors requires a critical input from the upstream 5G network provider and combines this with its own downstream technology. Of particular relevance for vertical sector coupling are the innovational complementarities between upstream GPT and downstream application sectors. The focus on vertical sector coupling also has important policy implications. Although the evolution of 5G networks strongly depends on the entrepreneurial, market-driven activities of broadband network operators and application service providers, the future of 5G as a GPT is heavily contingent on the role of frequency management authorities and European regulatory policy with regard to data privacy and security regulations.

Public-private partnerships in Mexico: Challenges and opportunities at local level

A specific challenge related to infrastructure creation that is faced by several countries has to do with the lack of participation to an optimal level of subnational governments in the development of Public Private Partnership (PPP) projects which, in turn, could offset the existing infrastructure limitations. In this article, we analyze the Mexican case, whose main feature is that, despite implementing the PPP scheme for almost 10 years and having technical assistance from international organizations to establish the required institutional framework (i.e. legal and technical dimensions), local governments have not been able to create the necessary competencies to carry out this type of project. In order to assess local governments on this subject, we conducted an analysis based on the model designed by the OECD in relation to the execution of PPP projects. A proposal to explain the lack of local government participation in PPP schemes, rests on the foundations of so-called “subnational authoritarianism.”

OPEX-risk as a source of CAPEX-bias in monopoly regulation

This paper shows with a formal model that under monopoly regulation, OPEX-risk can be a source for a CAPEX-bias. If OPEX and CAPEX are substitutes, the regulated firm can reduce the risk of the firm and thereby reduce the true cost of capital by rebalancing OPEX and CAPEX. If the regulated rate-of-return on capital is not influenced by the firm’s actions, this creates a margin between the regulated rate-of-return and the true cost of capital; this causes a CAPEX-bias. We examine the so-called fixed-OPEX-CAPEX-share (FOCS), which is a variation of TOTEX-regulation, as a promising remedy to address the CAPEX-bias. We argue that FOCS is effective to address the CAPEX-bias, while it can easily be implemented.