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Price disclosure by two-sided platforms

Author

Listed:
  • BELLEFLAMME Paul,

    (CORE, UCLouvain)

  • PEITZ Martin,

    (Universität Mannheim)

Abstract

We consider two-sided platforms with the feature that some users on one or both sides of the market lack information about the price charged to participants on the other side of the market. With positive cross-group external effects, such lack of pricie information makes demand less elastic. A monopoly platform does not benefit from opaqueness and optimality reveals price information. By contrast, in a two-sided singlehoming duopoly, platforms benefit from opaqueness and, thus, do not have an incentive to disclose price information. In competitive bottleneck markets, results are more nuanced: if one side is fully informed (for exogenous reasons), plaltforms may decide to inform users on the other side either fully, partially or not at all, depending on the strength of cross-group external effects and hte degree of horizontal differentiation.

Suggested Citation

  • BELLEFLAMME Paul, & PEITZ Martin,, 2019. "Price disclosure by two-sided platforms," LIDAM Discussion Papers CORE 2019011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2019011
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    References listed on IDEAS

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    Cited by:

    1. Martin Peitz, 2023. "Governance and Regulation of Platforms," CRC TR 224 Discussion Paper Series crctr224_2023_480, University of Bonn and University of Mannheim, Germany.
    2. Juan Manuel Sánchez-Cartas, 2021. "Intellectual property and taxation of digital platforms," Journal of Economics, Springer, vol. 132(3), pages 197-221, April.
    3. Yang Geng & Yulin Zhang & Jing Li, 2023. "Two-sided competition, platform services and online shopping market structure," Journal of Economics, Springer, vol. 138(2), pages 95-127, March.
    4. Guillaume Monchambert, 2023. "Pricing of myopic multi-sided platforms: theory and application to carpooling," Working Papers halshs-03980205, HAL.
    5. Geng, Yang & Zhang, Yulin, 2020. "Platform launch in two-sided markets and users’ expectations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 558(C).

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    More about this item

    Keywords

    price transparency; two-sided markets; competitive bottleneck; platform competition; price information; strategic disclosure;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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