Price disclosure by two-sided platforms

Paul Belleflamme and Martin Peitz

International Journal of Industrial Organization, 2019, vol. 67, issue C

Abstract: We consider two-sided platforms with the feature that some users on one or both sides of the market lack information about the price charged to participants on the other side of the market. With positive cross-group external effects, such lack of price information makes demand less elastic. A monopoly platform does not benefit from opaqueness and optimally reveals price information. By contrast, in a two-sided singlehoming duopoly, platforms benefit from opaqueness and, thus, do not have an incentive to disclose price information. In competitive bottleneck markets, results are more nuanced: if one side is fully informed (for exogenous reasons), platforms may decide to inform users on the other side either fully, partially or not at all, depending on the strength of cross-group external effects and the degree of horizontal differentiation.

Keywords: Price transparency; Two-sided markets; Competitive bottleneck; Platform competition; Price information; Strategic disclosure (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (9)

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Working Paper: Price Disclosure by Two-Sided Platforms (2019)
Working Paper: Price disclosure by two-sided platforms (2019)
Working Paper: Price disclosure by two-sided platforms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:67:y:2019:i:c:s0167718719300517

DOI: 10.1016/j.ijindorg.2019.102529

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