Data Linkage between Markets: Does the Emergence of an Informed Insurer Cause Consumer Harm?

Claudia Herresthal, Tatiana Mayskaya and Arina Nikandrova

No 17947, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A merger of two companies that are active in seemingly unrelated markets creates data linkage: by selling a product in one market, the merged company acquires informational advantage in a competitive insurance market. In the insurance market, the informed insurer earns an economic rent through cream-skimming. Some of this rent is competed away in the product market. Overall, the data linkage makes the consumers better off. The role of competitiveness of each market, the possibility of market monopolization and data-sharing requirement are discussed.

JEL-codes: D4 D82 G22 L22 L41 L86 (search for similar items in EconPapers)
Date: 2023-03
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Working Paper: Data Linkage Between Markets: Does Emergence of an Informed Insurer Cause Consumer Harm? (2023)
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