Price Disclosure by Two-Sided Platforms

Paul Belleflamme and Martin Peitz

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We consider two-sided platforms with the feature that some users on one or both sides of the market lack information about the price charged to participants on the other side of the market. With positive cross-group external effects, such lack of price information makes demand less elastic. A monopoly platform does not benefit from opaqueness and optimally reveals price information. By contrast, in a two-sided singlehoming duopoly, platforms benefit from opaqueness and, thus, do not have an incentive to disclose price information. In competitive bottleneck markets, results are more nuanced: if one side is fully informed (for exogenous reasons), platforms may decide to inform users on the other side either fully, partially or not at all, depending on the strength of cross-group external effects and the degree of horizontal differentiation.

Keywords: price transparency; two-sided markets; competitive bottleneck; platform competition; price information; strategic disclosure (search for similar items in EconPapers)
JEL-codes: D43 L12 L13 (search for similar items in EconPapers)
Pages: 31
Date: 2019-06
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic, nep-pay and nep-reg
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Price disclosure by two-sided platforms (2019)
Working Paper: Price disclosure by two-sided platforms (2019)
Working Paper: Price disclosure by two-sided platforms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2019_099

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