In this video, Professor Sandro Shelegia (UPF and BSE) explains his ERC Consolidator Grant project The Foundations for Antitrust and Policy on Digital Platforms.

Video transcript:

My name is Sandro Shelegia, I am an Associate Professor of Economics at Universitat Pompeu Fabra and Barcelona School of Economics. I am a recent winner of an ERC grant for the project Foundations for Antitrust and Policy on Digital Platforms.

​My project consists of four different parts.

​The first project aims to study digital marketplaces such as Amazon, that not only act as intermediaries between third party sellers and consumers, but also themselves act as sellers on their own platform.

​This creates various potential problems because such a platform may advantage its own offerings over the offerings of third party sellers, charge high fees to third party sellers and generally harm competition and consumers.

​The project aims at understanding whether current policy proposals around such marketplaces are going to address the problems that I have described and to the extent that they do not, what proposals need to be put in place to actually solve these potential problems.

​The second project starts with the premise that there’s tens of millions of products on digital marketplaces. So without marketplaces recommending a relevant product to consumers, consumers will never be able to find the right product for them.

​However, this arrangement creates a situation where the marketplace may, instead of steering consumers to the best product, steer them to the most profitable product from the standpoint of the marketplace.

​The project aims at understanding how this arrangements work and what are the potential benefits and cost to society and to the extent that the costs outweigh benefits, what kind of policies to put in place to alleviate the problems that may arise.

​In the third project, which is closely related to the second one, I plan to study recommendation algorithms.

​I start with the premise that the recommendation algorithm that is able to give us extremely precise recommendations is inherently limited in how much it can learn, because such recommendations induce us to go with the recommendation and therefore to not generate data for the algorithm to learn further.

​I therefore will study what are the limits of such recommendations and to the extent that they are able to come close to recommending exactly what we want, how beneficial or harmful such a system can be for consumers.

​In the 4th project, I plan to collaborate with Massimo Motta from BSE, where we’ll try to understand the origins of the dominance of digital platforms.

​In particular, we will try to understand mergers between incumbent platforms and start-up platforms such as Facebook’s acquisition of WhatsApp.

​Our aim is to understand how these acquisitions affect the users of these platforms, advertisers to these users and general incentives to innovate and become dominant platforms.

The main objective of this project is to shape public policy around digital platforms.