Mark Armstrong

Bio: Mark Armstrong is an academic researcher from University of Oxford. The author has contributed to research in topics: Competition (economics) & Oligopoly. The author has an hindex of 48, co-authored 119 publications receiving 17217 citations. Previous affiliations of Mark Armstrong include New York University & Nuffield College.

A Theory of Incentives in Procurement and Regulation.

Abstract: More then just a textbook, A Theory of Incentives in Procurement and Regulation will guide economists' research on regulation for years to come. It makes a difficult and large literature of the new regulatory economics accessible to the average graduate student, while offering insights into the theoretical ideas and stratagems not available elsewhere. Based on their pathbreaking work in the application of principal-agent theory to questions of regulation, Laffont and Tirole develop a synthetic approach, with a particular, though not exclusive, focus on the regulation of natural monopolies such as military contractors, utility companies, and transportation authorities. The book's clear and logical organization begins with an introduction that summarizes regulatory practices, recounts the history of thought that led to the emergence of the new regulatory economics, sets up the basic structure of the model, and previews the economic questions tackled in the next seventeen chapters. The structure of the model developed in the introductory chapter remains the same throughout subsequent chapters, ensuring both stability and consistency. The concluding chapter discusses important areas for future work in regulatory economics. Each chapter opens with a discussion of the economic issues, an informal description of the applicable model, and an overview of the results and intuition. It then develops the formal analysis, including sufficient explanations for those with little training in information economics or game theory. Bibliographic notes provide a historical perspective of developments in the area and a description of complementary research. Detailed proofs are given of all major conclusions, making the book valuable as a source of modern research techniques. There is a large set of review problems at the end of the book.

Competition in Two-Sided Markets ¤

Abstract: There are many examples of markets involving two groups of participants who need to interact via intermediaries. Moreover, these intermediaries usually have to compete for business from both groups. Examples include academic publishing (where journals facilitate the interaction between authors and readers), advertising in media markets (where newspapers or TV channels enable adverts from producers to reach consumers), payment systems (where credit cards can be a convenient method of transaction between consumers and retailers), and telecommunications networks (where networks are used to provide links between callers and those who receive calls). The paper surveys recent theoretical work on these two-sided markets. The main questions are (i) what determines which side of the market is subsidized (if either) in order to attract the other side, and (ii) is the resulting outcome socially e¢cient?

Competition in Two-Sided Markets

Abstract: There are many examples of markets involving two groups of agents who need to interact via 'platforms', and where one group's benefit from joining a platform depends on the number of agents from the other group who join the same platform. This paper presents theoretical models for three variants of such markets: a monopoly platform; a model of competing platforms where each agent must choose to join a single platform; and a model of 'competing bottlenecks', where one group wishes to join all platforms. The main determinants of equilibrium prices are (i) the relative sizes of the cross-group externalities, (ii) whether fees are levied on a lump-sum or per-transaction basis, and (iii) whether a group joins just one platform or joins all platforms.

Regulatory Reform: Economic Analysis and British Experience

Abstract: Regulatory reform had its beginnings in the United States in the 1970s, and today it is taking place around the globe. One of the central questions for industrial policy is how to regulate firms with market power. Regulatory Reform tackles this important policy issue in two parts: it describes an analytical framework for studying the main issues in regulatory reform, and then applies the analysis to the British experience in four utility industries - telecommunications, gas, electricity, and water supply. Britain's utility industries, state-owned monopolies just ten years ago, offer a dramatic example of comprehensive reforms with parallels elsewhere: industries have been restructured, markets have been liberalized, and new regulatory methods and institutions have been created. The authors focus on common policy questions that arise in each industry while taking into account the considerable diversity between the industries and the different reform policies adopted. The analysis and experience in Britain's utility industries also provides a rich variety of issues concerning monopolistic and anticompetitive practices that are of interest for competition policy in general.

Multiproduct Nonlinear Pricing

Abstract: Typically, work on mechanism design has assumed that all private information can be captured in a single scalar variable. This paper explores one way in which this assumption can be relaxed in the context of the multiproduct nonlinear pricing problem. It is shown that the firm will choose to exclude some low value consumers from all markets. A class of cases that allow explicit solution is derived by making use of a multivariate form of "integration by parts." In such cases the optimal tariff is cost-based.

Bowling alone: The collapse and revival of American community

Abstract: The present historical moment may seem a particularly inopportune time to review Bowling Alone, Robert Putnam's latest exploration of civic decline in America. After all, the outpouring of volunteerism, solidarity, patriotism, and self-sacrifice displayed by Americans in the wake of the September 11 terrorist attacks appears to fly in the face of Putnam's central argument: that \"social capital\" -defined as \"social networks and the norms of reciprocity and trustworthiness that arise from them\" (p. 19)'has declined to dangerously low levels in America over the last three decades. However, Putnam is not fazed in the least by the recent effusion of solidarity. Quite the contrary, he sees in it the potential to \"reverse what has been a 30to 40-year steady decline in most measures of connectedness or community.\"' As an example of how the current \"war on terrorism\" could generate a durable civic renewal, Putnam points to the burst in civic practices that occurred during and after World War II, which he says \"permanently marked\" the generation that lived through it and had a \"terrific effect on American public life over the last half-century.\" 3 If Americans can follow this example and channel their current civic

Platform competition in two‐sided markets

Abstract: Many if not most markets with network externalities are two-sided. To succeed, platforms in industries such as software, portals and media, payment systems and the Internet, must “get both sides of the market on board.” Accordingly, platforms devote much attention to their business model, that is, to how they court each side while making money overall. This paper builds a model of platform competition with two-sided markets. It unveils the determinants of price allocation and end-user surplus for different governance structures (profit-maximizing platforms and not-for-profit joint undertakings), and compares the outcomes with those under an integrated monopolist and a Ramsey planner. (JEL: L5, L82, L86, L96)

Two-sided markets: a progress report

Abstract: The paper provides a road map to the burgeoning literature on two-sided markets and presents new results. It identifies two-sided markets with markets in which the structure, and not only the level of prices charged by platforms matters. The failure of the Coase theorem is necessary but not sufficient for two-sidedness. The paper builds a model integrating usage and membership externalities, that unifies two hitherto disparate strands of the literature emphasizing either form of externality, and obtains new results on the mix of membership and usage charges when price setting or bargaining determine payments between end-users.