Data Portability and Competition: Can Data Portability Increase both Consumer Surplus and Profits?

Doh-Shin Jeon and Domenico Menicucci

No 23-1450, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We study how data portability aspects consumer surplus and firms profits in a two-period model with a switching cost where two rms compete under a non-negative pricing constraint. The firms can circumvent the constraint by tying another complementary free service (called "freebies") with the original service. We consider a general framework of incomplete pass-through of freebies into consumer benet, which includes the two extreme cases of no pass through and full pass through. Regarding the effect on consumer surplus, data portability involves a trade-off between intensifying competition after consumer lock-in and reducing rent dissipation before consumer lock-in. For an intermediate range of pass-through rates, data portability increases both consumer surplus and profits.

JEL-codes: D21 D43 L13 L15 (search for similar items in EconPapers)
Date: 2023-06-27
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-reg
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Related works:
Journal Article: Data portability and competition: Can data portability increase both consumer surplus and profits? (2024)
Working Paper: Data portability and competition: Can data portability increase both consumer surplus and profits? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:128175

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