Second-degree Price Discrimination by a Two-sided Monopoly Platform

Jeon, Doh-Shin, Kim, Byung-Cheol and Menicucci, Domenico (2016) Second-degree Price Discrimination by a Two-sided Monopoly Platform. TSE Working Paper, n. 16-690, Toulouse

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Official URL: http://tse-fr.eu/pub/30705

Abstract

We study second-degree price discrimination by a two-sided monopoly platform. We find that the platform may optimally forgo price discrimination and offer a single contract on the side that generates strong externalities due to non-responsiveness (Guesnerie and Laffont 1984). However, under certain conditions, the platform may mitigate or remove this non-responsiveness by properly designing price discrimination on the other side. Our research also delivers a welfare analysis of price discrimination in two-sided markets. Then we provide two different applications of our theory: the net neutrality debate and an optimal mechanism design for an advertising platform mediating consumers and advertisers.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2016
Place of Publication: Toulouse
Uncontrolled Keywords: (second-degree) price discrimination, two-sided markets, non-responsiveness, type reversal, advertising platform, net neutrality
JEL codes: D4 - Market Structure and Pricing
D82 - Asymmetric and Private Information
L5 - Regulation and Industrial Policy
M3 - Marketing and Advertising
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 06 Sep 2016 08:11
Last Modified: 21 Mar 2018 14:09
OAI ID: oai:tse-fr.eu:30705
URI: http://publications.ut-capitole.fr/id/eprint/22343

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