A note on price regulation in two-sided markets

Dennis Weisman () and Soheil Nadimi ()
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Dennis Weisman: Kansas State University
Soheil Nadimi: Kansas State University

Economics Bulletin, 2019, vol. 39, issue 4, 2766-2777

Abstract: This paper examines price level regulation in two-sided markets with linear demands. We find that (i) price level regulation increases the price allocation asymmetry when reservation prices differ between the two sides of the market; and (ii) changes in the level of the price cap are divided equally between the two sides of the market whether demands are symmetric or asymmetric. Finally, and potentially important from a policy perspective, the numerical simulations suggest that the efficiency gains from price level regulation are relatively modest for a wide range of cost parameters.

Keywords: two-sided markets; price allocations; regulation; efficiency (search for similar items in EconPapers)
JEL-codes: L5 L9 (search for similar items in EconPapers)
Date: 2019-12-08
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