Data Sales and Data Dilution

Ernest Liu, Song Ma and Laura Veldkamp

No 20120, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We explore indicators of market power in a data market. Markups cannot measure competition, because most data products’ marginal cost is zero, making the markup infinite. Yet, data monopolists may not exert monopoly power because they cannot commit to restricting data sales to future customers. This limited commitment and strategic substitutability of data undermine sellers’ monopoly power. But data subscriptions restore this monopoly power. Evidence from online data markets supports the model's insight that subscriptions indicate market power. Model and evidence reveal that data subscriptions are better for consumers because they sustain the incentive to invest in high-quality data.

Keywords: Data markets; Data economy (search for similar items in EconPapers)
JEL-codes: C6 D4 D5 L1 (search for similar items in EconPapers)
Date: 2025-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20120 (application/pdf)

Related works:
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:20120

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20120

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 ().