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The Effects of Conventional Policies on Price Structure and Consumer Surplus in a Two-sided Market–an Economics Experiment

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  • Daniel M. Nedelescu

    (University of Oklahoma)

Abstract

This study investigates the effects of different conventional policies on price structure and consumer surplus in a two-sided market monopoly. Consistent with theory, in a laboratory environment, the majority of subjects charge a price below cost, even if there is no threat of entry by new competitors. However, the prices do not reach the predicted prices. When three different policies are imposed in this market, the prices change according to the theory. Results regarding changes in consumer surplus are reported as well. These results suggest that policymakers should distinguish between one-sided and two-sided markets in determining optimal policies.

Suggested Citation

  • Daniel M. Nedelescu, 2025. "The Effects of Conventional Policies on Price Structure and Consumer Surplus in a Two-sided Market–an Economics Experiment," Networks and Spatial Economics, Springer, vol. 25(1), pages 173-198, March.
    • Handle: RePEc:kap:netspa:v:25:y:2025:i:1:d:10.1007_s11067-024-09659-7
    DOI: 10.1007/s11067-024-09659-7
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    More about this item

    Keywords

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    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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