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Candidate: Lian Zhu

Thesis title: Bilateral negotiations, vertical contracting, and firm behaviors in network

Abstract:

This dissertation is to propose theoretical models that can analyze the economic outcomes of different peering relationships, interconnectivity methods, and firm behaviors in the world of network. The first two chapters are focusing on bilateral negotiations and vertical contracting in two-sided markets in network. We have witnessed that in the last two decades, the internet industry has changed dramatically especially for the interconnection relationships. With the booming video-streaming services, internet service providers (ISP) have been trying hard to deliver the enormous data that are needed to support video-streaming. As a result, it gradually become a huge burden for ISPs and they want to change the peering relationship from settlement-free peering to paid peering, and it creates a widely discussed topic among all parties involved.  In the first two chapters of my dissertation, I will find out what happens to end users, content providers and ISPs if ISPs decide to use paid peering in the settings of two-sided markets. The first chapter would be using a one-shot model to derive the equilibrium and the second chapter will have a 2-by-2 model where we allow for renegotiations. And the third chapter is to examine the effects of having subscription service in video-sharing platforms. This chapter presents a model to study how a monopoly firm chooses the density of advertisements and subscription price and how end users react to it. I will show that when offering the subscription service, the firm has an incentive to add more advertisements for non-subscribers and hence reduce the quality of the service and non-subscribers will spend less time on the website than they originally want to choose which results in a welfare loss for all end users. However, the social welfare will be increasing with subscription service and this increase will be enlarged if the fee is regulated to be lower than the monopoly price.

Committee:

Dr. Mikhail Klimenko, advisor, School of Economics, Georgia Institute of Technology

Dr. Usha Nair-Reichert, School of Economics, Georgia Institute of Technology

Dr. Patrick McCarthy, School of Economics, Georgia Institute of Technology

Dr. Constantine Dovrolis, School of Computer Science, Georgia Institute of Technology

Dr. Maria Arbatskaya, Department of Economics, Emory University

Time: 8am–10am July 25th

Location: Zoom Meeting

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https://zoom.us/j/98789653639?pwd=ZkVPQ1Vpb0NLVUpsREIxYVo0K0VNZz09

Meeting ID: 987 8965 3639

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