Should vertically integrated platforms be mandated to share information with their rivals?

Jorge Padilla, Salvatore Piccolo () and Helder Vasconcelos

Economics Letters, 2021, vol. 203, issue C

Abstract: We examine a vertically integrated platform’s incentives to share demand information with a ‘third-party’ seller. When consumers perceive the platform’s private label and the seller’s products as relatively close substitutes, and quality strongly affects demand, the platform tends not to share information with the seller. We find that consumers are often better off without information sharing even in the absence of explicit privacy concerns, since information sharing facilitates rent extraction via targeted prices. The region of parameters where this occurs expands as the platform’s bargain power vis-à-vis the seller increases.

Keywords: Consumer data; Information sharing; Price discrimination; Product quality; Vertically integrated platforms (search for similar items in EconPapers)
JEL-codes: D47 D85 L5 L81 M3 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:203:y:2021:i:c:s0165176521001269

DOI: 10.1016/j.econlet.2021.109849

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