Price Discrimination in Two‐Sided Markets

Liu, Qihong; Serfes, Konstantinos

doi:10.1111/jems.12038

Cited by 53 publications

(40 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our paper also relates to the literature on two-sided markets. To the best of our knowledge, Liu and Serfes (2010) is the only paper investigating price discrimination in two-sided markets. However, their modeling approach does not fit well with the newspaper industry as they consider perfect price discrimination on both sides and in a Hotelling framework.…”

Section: Introductionmentioning

confidence: 99%

Price Discrimination in a Two-Sided Market: Theory and Evidence from the Newspaper Industry

Angelucci¹,

Cagé

2013

SSRN Journal

View full text Add to dashboard Cite

We investigate theoretically and empirically the determinants of second-degree price discrimination in two-sided markets. We build a model in which a newspaper must attract both readers and advertisers. Readers are uncertain as to their future benefit from reading, and heterogeneous in their taste for reading. Advertisers are heterogeneous in their outside option, taste for subscribers, and taste for occasional buyers. To estimate empirically the effect of the advertisers' side of the industry on price discrimination on the readers' side, we use a "quasi-natural experiment". We exploit the introduction of advertisement on French Television in 1968, which we treat as a negative shock on advertisement revenues of daily national newspapers (treated group), but not on daily local newspapers (control group). We build a new dataset on French local newspapers between 1960 and 1974 and perform a Differences-inDifferences analysis. We find robust evidence of increased price discrimination as a result of a drop in advertisement revenues. JEL: L11, M13 * We gratefully acknowledge the many helpful comments and suggestions from Ariel Pakes, Andrei Veiga, Glen Weyl and Alex White. We are also grateful to seminar participants at Harvard University and SHUFE in Shanghai. Charlotte Coutand provided outstanding research assistance. We gratefully acknowledge financial support from the NET Institute, www.NETinst.org. All errors remain our own.

show abstract

Section: Introductionmentioning

confidence: 99%

Price Discrimination in a Two-Sided Market: Theory and Evidence from the Newspaper Industry

Angelucci¹,

Cagé

2013

SSRN Journal

View full text Add to dashboard Cite

show abstract

“… Choi () and Liu and Serfes () derive partial multi‐homing results from the horizontally differentiated preference for platforms while we present an endogenous solution result without it. …”

mentioning

confidence: 99%

Entry of FinTech Firms and Competition in the Retail Payments Market

Jun

Yeo

2016

Asia-Pac J of Fin Stud

View full text Add to dashboard Cite

We investigate the effects of entry of financial technology (FinTech) based firms on competition in the retail payments market. With a model of two-sided market with vertical restraints, we derive the following results. When only the entry of a vertically integrated (or end-to-end service) provider is allowed, either all merchants opt for multi-homing or no entry occurs, regardless of the regulatory requirement. On the other hand, if the entry of a downstream-only (or front-end service) provider is allowed, a partial multi-homing equilibrium could emerge under certain conditions, in which the entry of an end-to-end service provider does not occur. Without regulation, however, the vertically integrated incumbent does not voluntarily provide the back-end service to the entrant in general. This suggests the need for proper regulatory measures to reach a socially desirable outcome from the new entry in the retail payments market.

show abstract

“…Under single-homing, when platform A signs up an extra agent, it means that platform B loses this agent, resulting in head-on competition between the platforms. In contrast, under multi-homing, when an agent joins platform A, it does not prevent the same agent from joining platform B, so each platform is competing with the outside option instead of head-on competition (see Liu and Serfes, 2013). The second implication is that multi-homing also changes competition on the opposite side (Rysman, 2009).…”

Section: Introductionmentioning

confidence: 99%