Big Data and Digital Market Concentration
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Journal Title
Journal ISSN
Volume Title
School of Business |
Bachelor's thesis
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Author
Date
2023
Department
Major/Subject
Mcode
Degree programme
Taloustiede
Language
en
Pages
26+7
Series
Abstract
The digital market is described as a "winner-take-all" market in which the ultimate result is an oligopoly. Network effects are a key characteristic of the digital multi-sided markets, and they can cause concentration issues. Big Data is among the newest digital trends and many firms are investing in analyzing it to gain an edge over their competition and to gain even more market power. This literature review aims to discuss the possibility that Big Data might cause even further concentration in the market leading to more monopolistic competition and thus deadweight loss issues and efficiency issues. The role of Big Data as a rare input is much debated. However, it is agreed that data allows for significant cost reductions throughout production. It seems that data allows entry to connected markets with lower costs and allows dominating companies to tip these related markets to their benefit. Big data seems to heighten winner-take-all market dynamics when it comes to decreasing marginal costs, network effects, and economies of scale and scope.Description
Thesis advisor
Kitti, MitriKeywords
winner-take-all, network effects, big data, platform economy
