Data and Competition: A Simple Framework

Alexandre de Cornière and Greg Taylor

No 23-1404, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Does enhanced access to data foster or hinder competition among firms? Using a competition-in-utility framework that encompasses many situations where firms use data, we model data as a revenue-shifter and identify two opposite effects: a mark-up effect according to which data induces firms to compete harder, and a surplus-extraction effect. We provide conditions for data to be pro- or anti-competitive, requiring neither knowledge of demand nor computation of equilibrium. We apply our results to situations where data is used to recommend products, monitor insuree behavior, price-discriminate, or target advertising. We also revisit the issue of data and market structure.

JEL-codes: L1 L4 L5 (search for similar items in EconPapers)
Date: 2023-01-31, Revised 2024-08
New Economics Papers: this item is included in nep-big, nep-com, nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:32535

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