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Protectionism and platform revenues

Author

Listed:
  • Massimo Morelli
  • Gianmarco I. P. Ottaviano
  • Tommaso Sonno

Abstract

The Arab Spring made evident the dangers of democratization of information for incumbent governments, prompting regulatory changes that helped digital platforms gain power. We document a set of political favors (tariff sparing) for US tech manufacturing in 2018, but the rise of platform revenues does not depend on such favors: digital platforms may benefit from tariffs even when they are not protected and their customers are not protected. In an open economy with ad valorem commissions on the tariff-inclusive consumer price, platform revenue rises with the tariff if and only if demand elasticity is below one in absolute value.

Suggested Citation

  • Massimo Morelli & Gianmarco I. P. Ottaviano & Tommaso Sonno, 2026. "Protectionism and platform revenues," CEP Discussion Papers dp2199, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp2199
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