A Framework for Detection, Measurement, and Welfare: Analysis of Platform Bias

Category: Marketing Seminar
When: 18 December 2023
, 16:30
 - 17:45
Where: RuW 1.201
Speaker: Prof. Imke Reimers (Associate Professor of Strategy and Business Economics at Cornell SC Johnson College of Business)

A Framework for Detection, Measurement, and Welfare: Analysis of Platform Bias


Regulators are responding to growing platform power with curbs on platforms’ potentially biased exercise of power, creating urgent needs for both a workable definition of platform bias and ways to detect and measure it. We develop a simple equilibrium framework in which consumers choose among ranked alternatives, while the platform chooses product display ranks based on product characteristics and prices. We define the platform’s ranks to be biased if they deliver outcomes that lie below the frontier that maximizes a weighted sum of seller and consumer surplus. This framework leads to two bias testing approaches, which we compare using Monte Carlo simulations, as well as data from Amazon, Expedia, and Spotify. We then illustrate the use of our structural framework directly, producing estimates of both platform bias and its welfare cost. The EU’s Digital Services Act’s provision for researcher data access would allow easy implementation of our approach in contexts important to policy makers.

More information on Prof. Imke Reimers can be found here.

The talk will take place from 16:30 - 17:45 hrs. in RuW 1.201.