Essays in Industrial Organization and Information Technology

Chapter 1 studies how consumers’ switching costs affect the pricing and profits of firms competing in two-sided markets such as Apple and Google in the smartphone market. When two-sided markets are dynamic – rather than merely static – I show that switching costs lower the first-period price if network externalities are strong, which is in contrast to what has been found in one-sided markets. By contrast, switching costs soften price competition in the initial period if network externalities are weak and consumers are more patient than the platforms. Moreover, an increase in switching costs on one side decreases the first-period price on the other side. Chapter 2 examines firms’ incentives to invest in local and flexible resources when demand is uncertain and correlated. I find that market power of the monopolist providing flexible resources distorts investment incentives, while competition mitigates them. The extent of improvement depends critically on demand correlation and the cost of capacity: under social optimum and monopoly, if the flexible resource is cheap, the relationship between investment and correlation is positive, and if it is costly, the relationship becomes negative; under duopoly, the relationship is positive. The analysis also sheds light on some policy discussions in markets such as cloud computing. Chapter 3 develops a theory of sequential investments in cybersecurity. The regulator can use safety standards and liability rules to increase security. I show that the joint use of an optimal standard and a full liability rule leads to underinvestment ex ante and overinvestment ex post. Instead, switching to a partial liability rule can correct the inefficiencies. This suggests that to improve security, the regulator should encourage not only firms, but also consumers to invest in security.

Privacy Tradeoffs in Information Technology Law

The thesis aims to make the dynamics of the tradeoffs involving privacy more visible; both theoretically and in two of the central current policy debates in European data protection law, the right to be forgotten and online tracking. In doing so, it offers an explanation for data protection law from an economic perspective and provides a basis for the evaluation of further data protection measures.

Smart Textile Sensors for Healthcare Monitoring

Wearable electronic textiles are an emerging research field playing a pivotal role among several different technological areas such as sensing, communication, clothing, health monitoring, information technology, and microsystems. The possibility to realise a fully-textile platform, endowed with various sensors directly realised with textile fibres and fabric, represents a new challenge for the entire research community. Among several high-performing materials, the intrinsically conductive poly(3,4-ethylenedioxythiophene) (PEDOT), doped with poly(styrenesulfonic acid) (PSS), or PEDOT:PSS, is one of the most representative and utilised, having an excellent chemical and thermal stability, as well as reversible doping state and high conductivity. This work relies on PEDOT:PSS combined with sensible materials to design, realise, and develop textile chemical and physical sensors. In particular, chloride concentration and pH level sensors in human sweat for continuous monitoring of the wearer's hydration status and stress level are reported. Additionally, a prototype smart bandage detecting the moisture level and pH value of a bed wound to allow the remote monitoring of the healing process of severe and chronic wounds is described. Physical sensors used to monitor the pressure distribution for rehabilitation, workplace safety, or sport tracking are also presented together with a novel fully-textile device able to measure the incident X-ray dose for medical or security applications where thin, comfortable, and flexible features are essential. Finally, a proof-of-concept for an organic-inorganic textile thermoelectric generator that harvests energy directly from body heat has been proposed. Though further efforts must be dedicated to overcome issues such as durability, washability, power consumption, and large-scale production, the novel, versatile, and widely encompassing area of electronic textiles is a promising protagonist in the upcoming technological revolution.