Second-Degree Price Discrimination by a Two-Sided Monopoly Platform

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

American Economic Journal: Microeconomics, 2022, vol. 14, issue 2, 322-69

Abstract: We study second-degree price discrimination by a two-sided monopoly platform. The incentive constraints of the agents on the value creation side may be in conflict with internalizing externalities on the value capture side, which may render pooling optimal. Even without such conflict between the two sides, pooling may be optimal due to type-dependent Spence effects when the preferences of the marginal agents diverge from those of the average agents on the value capture side. We perform a welfare analysis of price discrimination and show that prohibiting price discrimination improves welfare when there is a strong conflict between the two sides.

JEL-codes: D42 D62 D82 L12 L82 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Second-degree Price Discrimination by a Two-sided Monopoly Platform (2020)
Working Paper: Second-degree price discrimination by a two-sided monopoly platform (2016)
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DOI: 10.1257/mic.20190369

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