Two-Sided Platforms and Biases in Technology Adoption

Arbeitspapier

We investigate the relationship between market structure and platforms' incentives to adopt technological innovations in two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider innovations that affect the two sides in an opposite way. We compare private incentives with social incentives and find that the bias in technology adoption depends crucially on whether the non-negative pricing constraint binds or not. Our results provide a rationale for a tougher competition policy to curb concentration if competition authorities put more weight on consumer surplus in welfare calculations.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8559

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: General ; Market Structure, Firm Strategy, and Market Performance: General ; Regulation and Industrial Policy: General
• Subject: technology adoption ; two-sided platforms ; non-negative pricing constraint ; pass-through

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Choi, Jay Pil ; Jeon, Doh-Shin
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/226261
• Last update: 10.03.2025, 11:44 AM CET