January 1, 2025Econometrica

Competing Platforms and Transport Equilibrium

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Analysis of platform competition shows a $176 million loss in social welfare, suggesting that interoperability may enhance economic efficiency.

App-based transportation platform competition results in $176 million annual loss in social welfare, increasing inefficiency.
A spatial model estimates that platform market power leads to 21% waste of driver-generated traffic, harming economics.
Simulations comparing platform mergers indicate an 8% traffic reduction but a $77 million consumer surplus loss from higher prices.
Interoperability regulations could reduce wasteful traffic by 6%, improving economic efficiency without reducing competition.

Nicola Rosaia (2025) studied this question.

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January 1, 2025Econometrica

View Full Paper

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Authors

Analysis of platform competition shows a $176 million loss in social welfare, suggesting that interoperability may enhance economic efficiency.

App-based transportation platform competition results in $176 million annual loss in social welfare, increasing inefficiency.
A spatial model estimates that platform market power leads to 21% waste of driver-generated traffic, harming economics.
Simulations comparing platform mergers indicate an 8% traffic reduction but a $77 million consumer surplus loss from higher prices.
Interoperability regulations could reduce wasteful traffic by 6%, improving economic efficiency without reducing competition.

Nicola Rosaia (2025) studied this question.

View Full Paper

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Bookmark