2013/10/13 by Robert P. Gilles, Gilles, Robert P., Dimitrios Diamantaras +1
Business, Management and Accounting · Economics, Econometrics and Finance · #Business Strategy and Innovation #Computer Science and Game Theory (cs.GT) #Digital Platforms and Economics #FOS: Computer and information sciences #FOS: Physical sciences #Merger and Competition Analysis #Physics and Society (physics.soc-ph) #Social and Information Networks (cs.SI)
paper · pdf · doi:10.48550/arxiv.1310.3521
openalex publication_date 2013/10/13 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Recent research in industrial organisation has investigated the essential place that middlemen have in the networks that make up our global economy. In this paper we attempt to understand how such middlemen compete with each other through a game theoretic analysis using novel techniques from decision-making under ambiguity. We model a purposely abstract and reduced model of one middleman who pro- vides a two-sided platform, mediating surplus-creating interactions between two users. The middleman evaluates uncertain outcomes under positional ambiguity, taking into account the possibility of the emergence of an alternative middleman offering intermediary services to the two users. Surprisingly, we find many situations in which the middleman will purposely extract maximal gains from her position. Only if there is relatively low probability of devastating loss of business under competition, the middleman will adopt a more competitive attitude and extract less from her position.