Second-degree price discrimination by a two-sided monopoly platform

Doh-Shin Jeon, Domenico Menicucci and Byung-Cheol Kim

No 11488, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In this article we study second-degree price discrimination by a two-sided monopoly platform. We find novel distortions that arise due to the two-sidedness of the market. They make the standard result "no distortion at top and downward distortion at bottom" not holding. They generate a new type of non-responsiveness, different from the one found by Guesnerie and Laffont (1984). We also show that the platform may mitigate or remove non-responsiveness at one side by properly designing price discrimination on the other side. These findings help to address our central question, i.e., when price discrimination on one side substitutes for or complements price discrimination on the other side. As an application, we study the optimal mechanism design for an advertising platform mediating advertisers and consumers.

Keywords: (second-degree) price discrimination; Two-sided markets; Non-responsiveness; Type reversal; Advertising (search for similar items in EconPapers)
JEL-codes: D4 D82 L5 M3 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-com, nep-ind and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://cepr.org/publications/DP11488 (application/pdf)

Related works:
Journal Article: Second-Degree Price Discrimination by a Two-Sided Monopoly Platform (2022)
Working Paper: Second-degree Price Discrimination by a Two-sided Monopoly Platform (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11488

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11488

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().