Platform Design Biases in Ad-Funded Two-Sided Markets

Jay Pil Choi and Doh-Shin Jeon
Additional contact information
Jay Pil Choi: Michigan State University [East Lansing] - Michigan State University System

Post-Print from HAL

Abstract: We investigate how platform market power affects platforms' design choices in ad-funded 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 design choices affecting both sides in opposite ways and compare private incentives with social incentives. Platforms' design biases depend crucially on whether they can charge any price on the consumer side. We apply the framework to technology adoption, privacy, and ad load choices. Our results provide a rationale for a tougher competition policy to curb market power of ad-funded platforms with free services.

Date: 2022-02-25
New Economics Papers: this item is included in nep-com, nep-des, nep-gth, nep-ind, nep-mic, nep-pay and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-04018490v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in The RAND Journal of Economics, inPress

Downloads: (external link)
https://hal.science/hal-04018490v1/document (application/pdf)

Related works:
Working Paper: Platform Design Biases in Ad-Funded Two-Sided Markets (2023)
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:hal:journl:hal-04018490

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().