• Understand how digital markets work
• Pinpoint the differences between digital markets and traditional, mainly offline markets
• Formulate profitable business strategies in digital markets
• Discuss the platform business model of companies such as Google, Amazon, Facebook, Apple, AliBaba, Booking, etc.
• Recognize crucial economic principles governing the platform economy such as network effects and multi-sidedness
• ● Understand real-world cases and policy questions that stakeholders (including companies, policy makers, and economic consulting firms like Implement Economics) are dealing with at the moment in the area of digital markets
• Discuss the role of antitrust and regulation in the digital age
• Put into perspective the current policy discussions around digital markets (e.g., related to market dominance, mergers and acquisitions, and ecosystem failures) at the European level

The ongoing digitalization of our economy is affecting business models and changing the nature of competition in fundamental ways. Because of their multi-sidedness, network effects, and heavy dependence on technologies such as machine learning and AI, digital markets often work quite differently from traditional, mostly offline markets. This poses new important challenges for managers who are faced with the problem of digital disruption as well as for policy makers and enforcers across the globe who have to police these new competitive dynamics taming the new market power of Big Tech firms. This course will provide students with fresh perspectives and analytical frameworks to better understand these ongoing developments in the digital sphere. Topics that will be discussed throughout the course relate to, among others: platform-based business models, innovation eco-systems, envelopment strategies, consumer search behavior, recommender systems, data and algorithms as a strategic resource, as well as current policy discussions around blockchain technologies, artificial intelligence, and the potential abuse of market power in the tech sector.

The course has an applied nature, combining business strategy and economic theory to discuss practical cases and policy developments, which are shaping the way digital markets will work in Europe and globally going forward. It is envisaged for both business and economics students with an interest in digital markets. You will learn how to develop different value-creating strategies in digital markets, how they may be constrained by competition policy and what the main topics on the current agenda of European policy makers are. Furthermore, you will have the opportunity to see economic theory at work in digital markets and to understand the building blocks of current policy discussions at the European level and antitrust cases involving big tech. In this way the course provides students with a solid toolbox and broad knowledge that is used by both strategy teams at tech firms and big corporates, policy makers and advisors. Intermediate microeconomics and basic knowledge of game theory is a useful prerequisite to follow this course.

As a preparation for the exam assignment, the course will feature a case competition, organized in collaboration with Implement Economics ­– part of the Implement Consulting Group. This cooperation creates the opportunity to offer a more practical perspective on some of the theoretical topics and to draw from real-life cases in the area of digital competition.

Some selected literature (more will be announced in the syllabus):

• Goldfarb, A., and C. Tucker (2019). Digital Economics. Journal of Economic Literature, 57(1): 3–43.

• Motta, Massimo (2004) Competition Policy. Theory and Practice. Chapter: “Competition Policy: History, Objectives, and the Law”

• Cennamo, C. and J. Santalo (2013). Platform competition: Strategic trade-offs in platform markets. Strategic Management Journal, 34: 1331–50 
• Cunningham, C., F. Ederer, and S. Ma (2021). Killer Acquisitions. Journal of Political Economy, 129(3): 649–702.
• Agrawal, A., J. Gans, and A. Goldfarb (2019). Economic policy for artificial intelligence. Innovation Policy and the Economy, 19(1):139-59.
• Calvano, E., G. Calzolari, V. Denicolò, and S. Pastorello (2020). Artificial Intelligence, Algorithmic Pricing, and Collusion. American Economic Review, 110 (10): 3267–97.
• Cennamo, C., and D. Sokol (2021). Can the EU regulate platforms without stifling innovation? Harvard Business Review. 
• Carlton, D. and M. Waldman (2002). The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries. RAND Journal of Economics, 33 (2): 194–220 
• Catalini, C. and J. Gans (2016). Some Simple Economics of the Blockchain. Communications of the ACM, 63(7).