IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v72y2024i3p1052-1088.html
   My bibliography  Save this article

User Data and Endogenous Entry in Online Markets

Author

Listed:
  • Laura Abrardi
  • Carlo Cambini
  • Raffaele Congiu
  • Flavio Pino

Abstract

We investigate how the presence of a Data Broker (DB), who sells consumer data to downstream firms, affects firm entry and competition in a horizontally differentiated oligopoly market, in which data allow firms to price discriminate. The DB chooses the price and amount of data sold to each firm. We show that the data sale by the DB reduces excessive market entry, as the competition induced by personalized prices exerts a downward pressure on prices and profits. The data‐induced entry barrier and resulting weakened competition dominates the pro‐competitive effect of personalized prices. Consequently, while the DB's presence might alleviate excessive market entry, it also diminishes consumer surplus.

Suggested Citation

  • Laura Abrardi & Carlo Cambini & Raffaele Congiu & Flavio Pino, 2024. "User Data and Endogenous Entry in Online Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 72(3), pages 1052-1088, September.
    • Handle: RePEc:bla:jindec:v:72:y:2024:i:3:p:1052-1088
    DOI: 10.1111/joie.12383
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joie.12383
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joie.12383?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:72:y:2024:i:3:p:1052-1088. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.