OPERATIONAL AND ECONOMIC ANALYSIS OF MARKETPLACES

Abstract

Technological advances are enabling more businesses to be organized as marketplaces, creating a global economic trend towards platform companies with abundant information and sophisticated technology. A distinct characteristic ofmarketplace operations is that, decisions are not made and enforced by a central planner, but are rather the outcome of decentralized agents’ decisions, which can only be influenced by the marketplace but not directly controlled. This difference fundamentally changes the way firms must organize and manage their operations. It also changes the nature of competitive interactions among firms at an industry level. This thesis analyzes marketplaces by taking a combined view of both their economics and physical operations. Drawing on optimization, stochastic process, microeconomics, and industrial organization theories, it provides insights into both firm-level decisions and industry-level dynamics for modern marketplaces such as ride-hailing, retail, and food delivery.