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Two-Sided Platforms and Biases in Technology Adoption

Choi, Jay Pil and Jeon, Doh-Shin (2020) Two-Sided Platforms and Biases in Technology Adoption. TSE Working Paper, n. 20-1143, Toulouse

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We investigate the relationship between market structure and platforms' incentives to adopt technological innovations in two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider innovations that aspect the two sides in an opposite way. We compare private incentives with social incentives and find that the bias in technology adoption depends crucially on whether the non-negative pricing constraint binds or not. Our results provide a rationale for a tougher competition policy to curb concentration if competition authorities put more weight on consumer surplus in welfare calculations.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2020
Place of Publication: Toulouse
Uncontrolled Keywords: Technology Adoption, Two-Sided Platforms, Non-Negative Pricing Constraint, Pass-through
JEL Classification: D4 - Market Structure and Pricing
L1 - Market Structure, Firm Strategy, and Market Performance
L5 - Regulation and Industrial Policy
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 15 Sep 2020 08:35
Last Modified: 26 Nov 2020 14:46
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