Jeon, Doh-Shin and Menicucci, Domenico
(2023)
Data portability and competition: Can data portability increase both consumer surplus and profits?
European Journal of Law and Economics.
Abstract
We study how data portability affects consumer surplus and firms’ profits in a two-period model with a switching cost where two firms compete under a non-negative pricing constraint. The firms can circumvent the constraint by tying another complementary free service (called ”freebies”) with the original service. We consider a general framework of incomplete pass-through of freebies into consumer benefit, which includes the two extreme cases of no pass-through and full pass-through as special cases. Regarding the effect on consumer surplus, data portability involves a trade-off between intensifying competition after consumer lock-in and reducing rent dissipation before consumer lock-in. We find that for an intermediate range of pass-through rates, data portability increases both consumer surplus and profits.
Item Type: | Article |
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Language: | English |
Date: | 12 July 2023 |
Refereed: | Yes |
Place of Publication: | London |
Uncontrolled Keywords: | Data portability, Switching cost, Non-negative pricing constraint, Freebies, Pass-through |
JEL Classification: | D21 - Firm Behavior D43 - Oligopoly and Other Forms of Market Imperfection L13 - Oligopoly and Other Imperfect Markets L15 - Information and Product Quality; Standardization and Compatibility |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Site: | UT1 |
Date Deposited: | 25 Sep 2023 08:33 |
Last Modified: | 21 Feb 2024 10:18 |
OAI Identifier: | oai:tse-fr.eu:128498 |
URI: | https://publications.ut-capitole.fr/id/eprint/48256 |