The Amazon Business Model, the Platform Economy and Executive Compensation: Three Essays in Search Theory

Abstract:

Search frictions characterize most real-world transactions. This thesis is among the intellectual efforts to explain real-world phenomena through the lens of search theory. Chapter 2 develops a directed search framework to explain the emergence of a popular hybrid intermediation mode --- the marketmaking middlemen. Amazon, among many others, is the most famous example. Amazon is a middleman, as it specializes in buying and reselling products in its name. It is also a market-maker as it offers a platform where the participating buyers and sellers can search and trade with each other. Chapter 3 extends the baseline model of Chapter 2 on competing intermediaries. Chapter 4 turns to another highly debated topic, the incentive compensation of top executives. It shows that the executive job ladder which stems from the search frictions in the managerial labor market has a point in explaining the firm-size incentive premium.

About the author:

Bo Hu holds a B.Sc. in Economics from the Southwestern University of

Finance and Economics in Chengdu, China (2009) and an M.Phil. in Econometrics

from Tinbergen Institute and Erasmus University Rotterdam (2014). In 2014, he

joined the Department of Economics at the Vrije Universiteit Amsterdam as a PhD

candidate. Starting from September of 2019, he will work as an assistant

professor at Fudan University in Shanghai