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SubmittedOpen Access (License Unspecified), Open
Journal article
PRICE DISCRIMINATION IN TWO-SIDED MARKETS
Journal of economics & management strategy, v 22(4), pp 768-786
01 Dec 2013
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
We examine the profitability and welfare implications of targeted price discrimination (PD) in two-sided markets. First, we show that equilibrium discriminatory prices exhibit novel features relative to discriminatory prices in one-sided models and uniform prices in two-sided models. Second, we compare the profitability of perfect PD, relative to uniform prices in a two-sided market. The conventional wisdom from one-sided horizontally differentiated markets is that PD hurts the firms and benefits consumers, prisoners' dilemma. We show that PD, in a two-sided market, may actually soften the competition. Our results suggest that the conventional advice that PD is good for competition based on one-sided markets may not carry over to two-sided markets.
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Details
- Title
- PRICE DISCRIMINATION IN TWO-SIDED MARKETS
- Creators
- Qihong Liu - University of OklahomaKonstantinos Serfes - Drexel University
- Publication Details
- Journal of economics & management strategy, v 22(4), pp 768-786
- Publisher
- Wiley
- Number of pages
- 19
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000329300500001
- Scopus ID
- 2-s2.0-84882775278
- Other Identifier
- 991019170561004721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics
- Management