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Second-Degree Price Discrimination on Two-Sided Markets

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  • Böhme Enrico

    (Chair of Institutional Economics, Faculty of Economics and Business Administration, University of Marburg, Barfüßertor 2, D-35037 Marburg, Germany)

Abstract

The paper provides an analysis of the second-degree price discrimination problem on a monopolistic two-sided market. In a framework with two distinct types of agents on either side of the market, we show that under incomplete information the extent of platform access for high-demand agents is strictly lower than the benchmark level with complete information. In addition, we find that it is possible in the monopoly optimum that the contract for low-demand agents is more expensive than the one for high-demand agents if the extent of interaction with agents from the opposite market side is contract-specific.

Suggested Citation

  • Böhme Enrico, 2016. "Second-Degree Price Discrimination on Two-Sided Markets," Review of Network Economics, De Gruyter, vol. 15(2), pages 91-115, June.
    • Handle: RePEc:bpj:rneart:v:15:y:2016:i:2:p:91-115:n:1
    DOI: 10.1515/rne-2015-0051
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    Cited by:

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    More about this item

    Keywords

    monopolistic screening; second-degree price discrimination; two-sided markets;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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