New Insights on the Relation Between Market Structure and Market Performance
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This book examines the relationship between market structure and market performance in three distinct settings, using theoretical models. It analyzes how passive partial ownership affects antitrust review of subsequent mergers, how vertical integration shapes subscription pricing and content provision among competing video-streaming platforms, and how investment in network size can trap one- and two-sided platforms in a prisoner’s dilemma. Drawing on cases from China’s video-streaming and social-media markets, the study contributes to ongoing debates on minority shareholdings and digital platform competition policy.
Mengxi Zhang holds a doctorate in economics from the Düsseldorf Institute for Competition Economics (DICE), Heinrich Heine University Düsseldorf. She is currently a postdoctoral researcher at the Beijing Academy of Social Sciences. Her research interests are in industrial organization, with a particular focus on the platform economy and antitrust policies. Her research also extends to artificial intelligence and employment, where she employs case studies and empirical research to examine the impact of AI on employment and corporate labor practices.
T A B L E O F C O N T E N T S
Dedication 1
Acknowledgment 3
Chapter 1: Introduction 5
1.1 References 8
Chapter 2: Synergies, Passive Partial Ownership, and Merger Policy 9
2.1 Introduction 9
2.2 The Model 12
2.3 Equilibrium Analysis 14
2.4 Welfare Analysis 22
2.5 Conclusion 24
2.6 Appendix 26
2.7 References 31
Chapter 3: Competition among Online Streaming Platforms:
To Vertically Integrate or Not? 33
3.1 Introduction 33
3.2 Related Literature 36
3.3 The Model 38
3.4 Analysis 41
3.4.1 Two Vertically Separated Platforms 41
3.4.2 Two Vertically Integrated Platforms 42
3.4.3 Welfare Analysis 45
3.4.4 Asymmetric Case 45
3.4.5 Summary 48
3.5 Model with Advertisements 51
3.5.1 Equilibrium Analysis 53
3.5.2 Welfare Analysis 56
3.5.3 Asymmetric Case 57
3.6 Extension 57
3.6.1 Equilibrium Analysis 59
3.6.2 Welfare Analysis 65
3.7 Conclusion 66
3.8 Appendix 67
3.9 References 81
Chapter 4: Platforms Competition—”The Impact of Network Effect” 83
4.1 Introduction 83
4.1.1 The Theory of Network Effect 84
4.1.2 The Theory of Platform 85
4.1.3 The Chicken-and-Egg Problem 86
4.1.4 The Solutions 86
4.1.5 The Competition between Platforms 87
4.2 The Competition between Two-sided Platforms 88
4.2.1 The Model 88
4.2.2 Analysis 89
4.3 Competition between One-sided Platforms 95
4.3.1 The Model 95
4.3.2 Analysis 96
4.4 Conclusion 100
4.5 References 101
Chapter 5: Conclusion 103