Two-Sided Platforms and Biases in Technology Adoption

Jay Pil Choi and Doh-Shin Jeon

No 8559, CESifo Working Paper Series from CESifo

Abstract: 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 affect 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.

Keywords: technology adoption; two-sided platforms; non-negative pricing constraint; pass-through (search for similar items in EconPapers)
JEL-codes: D40 L10 L50 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-com, nep-mic and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8559

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