Data, Competition, and Digital Platforms

Dirk Bergemann and Alessandro Bonatti

American Economic Review, 2024, vol. 114, issue 8, 2553-95

Abstract: A monopolist platform uses data to match heterogeneous consumers with multiproduct sellers. The consumers can purchase the products on the platform or search off the platform. The platform sells targeted ads to sellers that recommend their products to consumers and reveals information to consumers about their match values. The revenue-optimal mechanism is a managed advertising campaign that matches products and preferences efficiently. In equilibrium, sellers offer higher qualities at lower unit prices on than off platform. The platform exploits its information advantage to increase its bargaining power vis-à-vis the sellers. Finally, privacy-respecting data-governance rules can lead to welfare gains for consumers.

JEL-codes: D11 D42 D44 D82 D83 M37 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Data, Competition, and Digital Platforms (2023)
Working Paper: Data, Competition, and Digital Platforms (2023)
Working Paper: Data, Competition, and Digital Platforms (2022)
Working Paper: Data, Competition, and Digital Platforms (2022)
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DOI: 10.1257/aer.20230478

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