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Price disclosure by two-sided platforms

Paul Belleflamme () and Martin Peitz

No 2019011, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

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 pricie information makes demand less elastic. A monopoly platform does not benefit from opaqueness and optimality 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), plaltforms 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 hte 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: 2019-06-18
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic, nep-pay and nep-reg
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Journal Article: Price disclosure by two-sided platforms (2019) Downloads
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