20661 - INNOVATION IN THE SHARING ECONOMY: THE ROLE OF PLATFORMS AND BUSINESS MODELS
Course taught in English
Go to class group/s: 31
No formal prerequisites.
The course explores emerging business models in the “economy of platforms”, with particular emphasis on the growth of the sharing economy and on the challenges and opportunities this may cause for firms and consumers. More in detail, the course investigates the development of innovative platforms, products and services in different contexts and ecosystems, most importantly, examines the strategies of different types of new or incumbent firms - network companies, platform developers, application providers. The course adopts a micro-level perspective, investigating the implication of innovation for the competition among incumbent firms and for the entry of new firms in the market. Furthermore, it provides insights on the impact of new technologies for the emergence of new and profitable opportunities for creating value added contents for the final users. Students learn the basic principles of ICT economics and have the opportunity to discuss and apply them to the emergence of new types of firms and businesses, new modes of competition and new roles for the users in the sharing economy. Traditional lectures are complemented with in-depth analysis of case studies from different industries, with the active participation of students and external speakers. The case studies are used to discuss existing evidence on the strategic competition in the platform markets.
- ICT platforms, ecosystems and innovation.
- Competing for innovation in ICT platforms and the role of complementors.
- Pricing in ICT platforms, regulation, and net-neutrality.
- Owning, Using, Renting: the basic economic principles of the sharing economy.
- Value creation in the sharing economy: the emergence of new business opportunities and new firms.
- The implications of the sharing economy for consumption.
- The evolution of regulation: information asymmetry, externalities and trust.
- Identify the characteristics of ICT platforms and the emergence of new business models.
- Explain the economics of platforms in terms of pricing and product/service offerings.
- Recognize the implications of the sharing economy for consumers and businesses.
- Illustrate the main regulatory issues related to platform-based markets.
- Interpret the dynamics of competition in platform-based sectors.
- Apply the methodologies and relevant theoretical approaches to discuss the strategies of existing and new firms.
- Analyse the most relevant regulatory implications for companies operating in platform-based markets.
- Develop innovative ideas concerning new platforms.
- Prepare the discussion of a case study of an innovative platform.
- Face-to-face lectures
- Guest speaker's talks (in class or in distance)
- Case studies /Incidents (traditional, online)
- Group assignments
The learning experience of the course is articulated around different teaching methods. Besides traditional frontal lectures, the students have the opportunity to discuss case studies and incidents concerning the development of new business models in platform markets, to interact with guest speakers from different platform-based companies, who provide their practical insights and perspectives on the process of innovation and competition in ICT platform-based markets, to work in team for the development of a final group project. The group work should aim at analysing the development of an innovative platform-based company. At the end of the course, all projects are presented and all students actively participate to the discussion, providing their comments and perspectives on the cases developed by other groups. Students are supposed to prepare a report of their case, which are used for the student assessment together with the presentation.
|Continuous assessment||Partial exams||General exam|
In order to evaluate the acquisition of the above-mentioned learning outcomes, the assessment procedure involves two main parts:
- 50% group work (written report and final presentation). The report is worth 90% of the final grade, while the presentation accounts for 10%. With the group work, students have to apply the knowledge acquired during the course to discuss and examine the empirical evidence related to the emergence of new business models in the ICT platform markets. Specifically, students are able to apply the existing approaches and methodologies to a specific case, identifying the economics of platforms (pricing and product/service offerings), analysing the regulatory implications of the development of a new platform-based service and interpreting the dynamics of competition in a specific context. In doing so, students have the opportunity to show teamwork abilities, as well as presentation and communication skills.
- 50% written exam based on course readings and lecture notes, consisting of open questions aimed to assess students’ ability to apply the analytical tools illustrated during the course and to explain the different theoretical approaches to innovation and competition in platform-based markets. The exam typically includes a set of statements to discuss, aimed to assess the ability of students to articulate their reasoning and to evaluate the potential effects of innovations and new business models for existing platform-based companies and within the overall market.
For non attending students, the final grade is completely based on a written exam including a set of compulsory open questions, which cover all the topics of the course. The exam aims at assessing the learning outcomes both in terms of understanding the theoretical approaches to innovation and competition in platform-based markets, and in terms of applying the methodologies to discuss the strategies of existing and new firms, as well as to evaluate the potential effects of innovations and new business models for existing platform-based companies and within the overall market. To this aim, besides course readings and lecture notes, students have to prepare on a set of additional readings.
Syllabus. Discussion of aims and objectives.
Greenstein, S. (2010). Innovative conduct in computing and internet markets. In: Hall and Rosenberg (eds.) “Handbook of economics of innovation” Vol. 1. North Holland, Amsterdam, 477-537.
Fransman, M. (2007). Innovation in the new ICT ecosystem. Communications & Strategies, 68, 89-110.
Pepall, L., Richards, D. J., & Norman, G. (2002). Industrial organization: Contemporary theory and practice. Thomson/South-Western, 654-674.
West, J. (2007). The economic realities of open standards: Black, white and many shades of gray. In S. Greenstein and V. Stango (eds.): Standards and Public Policy. Cambridge: Cambridge University Press.
Besen, S. M., & Farrell, J. (1994). Choosing how to compete: Strategies and tactics in standardization. The Journal of Economic Perspectives, 117-131.
Dranove, D., & Gandal, N. (2003). The Dvd‐vs.‐Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects. Journal of Economics & Management Strategy, 12(3), 363-386.
Chen, P. Y., & Forman, C. (2006). Can vendors influence switching costs and compatibility in an environment with open standards? MIS Quarterly, 541-562
Cusumano, M. A., & Gawer, A. (2002). The elements of platform leadership. MIT Sloan Management Review, 43(3), 51-58.
Gawer, A., & Henderson, R. (2007). Platform owner entry and innovation in complementary markets: Evidence from Intel. Journal of Economics & Management Strategy, 16(1), 1-34.
Suarez, F.F. & Kirtley, J. (2012). Dethroning an established platform. MIT Sloan Management Review 53(49), 35-41.
Gawer A. & Cusumano, M.A. (2002). Platform leadership. Harvard Business School Press (Chapters 5 on Cisco and 6 on Palm)
Rysman, M. (2009). Competition between Networks: A Study of the Market for Yellow Pages, The Review of Economic Studies, 71(2), 483-512
Eisenmann, T., Parker, G. G. & M.W. Van Alstyne (2006). Strategies for Two-Sided Markets. Harvard Business Review, October, 1-11.
Parker, G. G. & M.W. Van Alstyne (2005). Two-Sided Network Effects: A Theory of Information Product Design. Management Science, 51(10), 1494-1504
Levin, J.D. (2011). The economics of Internet markets. NBER Working Paper Series 16582.
Horton, J.J and Zeckhauser, R.J. (2016). Owning, using and renting: some simple economics of the “sharing economy”. NBER Working Paper Series 22029 (excluding section 4).
Sundararajan, A. (2016). The sharing economy. Chapter 2, 47-67.
Frenken, K. and Schor, J. (2017), “Putting the sharing economy into perspective”. Environmental Innovation and Societal Transitions 23, 3-10.
Laamanen, T., Pfeffer, J., Rong, U. and Van de Ven, A. (2016). Editors’ introduction: business models, ecosystems, and society in the sharing economy. Academy of Management Discoveries 4(3), 213-219.
Uzunca, B., Rigtering, J. C. and Ozcan, P. (2018). Sharing and shaping a cross-country comparison of how sharing economy firms shape their institutional environment to gain legitimacy. Academy of Management Discoveries 4(3), 248-272.
Guerzoni, M. and Nuccio, M. (2018). Big Data: Hell or heaven? Digital platforms and market power in the data-driven economy. Competition and Change 23(3), 312-328.
Lerner, A.V. (2014). The role of “big data” in online platform competition. Available at: http://ssrn.com/abstract=2482780
All the readings are available on the Bocconi Library's Course Reserve.
- Specific additional readings for not attending students are made available on Bboard at the beginning of the course.
- All the readings are available on the Bocconi Library's Course Reserve.