Yaxin LI

Motivated by IoT patent licensing, we develop a model in which one or multiple complementary providers sell inputs to manufacturers of devices linked through demand externalities. Equilibrium prices and quantities depend on each device’s Katz–Bonacich centrality in network of demand externalities which differs depending on the number of input providers. We use the model to revisit Cournot’s analysis of complementary monopolies in a device ecosystem. Applied to patent licensing, an increase in the number of complementary licensors generates both the standard increased-marginalization effect and a countervailing increased-internalization effect. We also identify a novel static coordination benefit of patent ownership. 

Data sharing is often viewed as a policy tool for limiting data-driven market power. This paper studies how the direction and extent of data sharing affect competition and welfare in the long run. We develop a dynamic model in which two platforms compete for users’ limited attention. The platforms differ in their initial amounts of user data and their data-processing productivities. Without data sharing, weak data feedback supports market co-participation, whereas stronger feedback may lead to market tipping. We show that the data-sharing game is equivalent to a no-sharing game with adjusted data productivities. Sharing by either platform softens competition, while the direction of sharing determines how attention is reallocated. Consequently, sharing by the less data-productive platform need not increase market concentration and may even make tipping less likely. It may also benefit the sharing platform despite reducing its market share. Finally, data sharing has a positive quality effect and an ambiguous attention-reallocation effect on social welfare.

We study how regulating prices for mandatory data sharing affects competition, data collection incentives, and market entry in data-driven industries. The model features an incumbent that collects user data while operating as a monopolist in the first period and a potential entrant that may enter in the second period, with product quality increasing in the volume of collected data. Firms compete through advertising. The analysis compares three regimes: voluntary data sharing, mandatory sharing at zero price, and mandatory sharing with a regulated positive price. Voluntary data sharing does not arise unless the entrant is substantially more efficient than the incumbent at exploiting data. Mandatory free data sharing can facilitate entry when entry costs are low but induces the incumbent to restrict first-period sales to reduce the entrant's quality advantage, lowering data generation and even deterring entry. Allowing the incumbent to charge a regulated positive price mitigates these distortions by improving incentives to collect data, but a higher regulated price also makes entry more costly.