This podcast is about economic issues related to online marketplaces and platforms.
We are joined by Greg Lewis, Senior Researcher at Microsoft Research, who is one of the leading experts in this new and growing field. Why have companies like Amazon, Microsoft, and eBay been hiring a lot of economists? We discuss the unique perspective that industrial organization economists have in using data to make strategic and market design decisions. We then discuss how the search ranking algorithm and other platform design choices can be used as strategic tools to incentivize platform participants. Next, we talk about why it’s difficult to measure the effects of changes to a platform even when experiments are possible. We then move on to a conversation about platform fees and the chicken and egg problem in platforms. Lastly, we discuss emerging issues such as competition in cloud computing.
Books, Papers, and Courses Mentioned:
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- Automobile Prices in Market Equilibrium by Steven Berry, James Levinsohn, and Ariel Pakes
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- Understanding Strategic Bidding in Multi-unit Auctions: A Case Study of the Texas Electricity Spot Market by Ali Hortacsu and Steven L. Puller
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- Machine Learning for Economists by Susan Athey and Guido Imbens
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- Just Starting Out: Learning and Price Competition in a New Market by Ulrich Doraszelski, Gregory Lewis, and Ariel Pakes
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- A Price Theory of Multi-Sided Platforms by Glen Weyl
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- Empirical Industrial Organization: A Progress Report by Liran Einav and Jonathan Levin. This is a good resource about the types of questions empirical industrial organization tries to answer.