The Law and Economics of Markets with Digital Platforms

Abstract

The arrival of the digital platform for buying and selling goods is altering the nature of markets by creating enormous economies of scale and enabling firms to reach purchasers far and wide. Further, digital platforms, especially when they are themselves profit-making firms, give rise to new regulatory challenges. This paper surveys research on the economics of digital platforms and their challenges to law and economics. Alongside, it builds simple models to characterize the nature of equilibria in oligopolistic and competitive markets that are mediated by private digital platforms. The paper closes with a discussion of regulatory options.