Data, Competition, and Digital Platforms
Name
bergemann-bonatti-2024-data-competition-and-digital-platforms.pdf
Description
Published version
Size
928.49 KB
Format
Adobe PDF
Checksum (MD5)
a64d674b3b1b3be921932bb85f4fafe0
Author(s)
Bergemann, Dirk
Bonatti, Alessandro
Date Issued
August 2024
Journal
American Economic Review
Publisher
American Economic Association
Citation
Bergemann, Dirk, and Alessandro Bonatti. 2024. "Data, Competition, and Digital Platforms." American Economic Review 114 (8): 2553–95.
Version
Final published version
Abstract
A monopolist platform uses data to match heterogeneous consumers with multiproduct sellers. The consumers can purchase the products on the platform or search off the platform. The platform sells targeted ads to sellers that recommend their products to consumers and reveals information to consumers about their match values. The revenue-optimal mechanism is a managed advertising campaign that matches products and preferences efficiently. In equilibrium, sellers offer higher qualities at lower unit prices on than off platform. The platform exploits its information advantage to increase its bargaining power vis-à-vis the sellers. Finally, privacy-respecting data-governance rules can lead to welfare gains for consumers. (JEL D11, D42, D44, D82, D83, M37)
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
Persistent DSpace Link
DOI of Published Version
10.1257/aer.20230478
