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Platform Pricing under Dispersed Information

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  • Jullien, Bruno
  • Pavan, Alessandro

Abstract

We study monopoly and duopoly pricing in a two-sided market with dispersed information about users' preferences. We first show how the dispersion of information introduces idiosyncratic uncertainty about participation rates and how the latter shapes the elasticity of the demands and thereby the equilibrium prices. We then study informative advertising campaigns and product design affecting the agents' ability to estimate their own valuations and/or the distribution of valuations on the other side of the market.

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Bibliographic Info

Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 793.

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Date of creation: Aug 2013
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Handle: RePEc:ide:wpaper:27580

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Keywords: two-sided markets; dispersed information; platform competition; global-games; informative advertising;

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  1. Carlsson, H. & Damme, E.E.C. van, 1993. "Global games and equilibrium selection," Open Access publications from Tilburg University urn:nbn:nl:ui:12-154416, Tilburg University.
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  5. Rochet, Jean-Charles & Tirole, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse.
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  11. Hanna Halaburda & Yaron Yehezkel, 2011. "Platform Competition under Asymmetric Information," Working Papers 11-05, NET Institute, revised Sep 2011.
  12. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
  13. Argenziano, Rossella & Ambrus, Attila, 2009. "Asymmetric Networks in Two-sided Markets," Scholarly Articles 4589709, Harvard University Department of Economics.
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  16. Rossella Argenziano, 2007. "Differentiated Networks: Equilibrium and Efficiency," Economics Discussion Papers 638, University of Essex, Department of Economics.
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  22. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
  23. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
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