IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/20668.html

Gatekeepers and Self-Preferencing: Incentives and Welfare Trade-offs in Two-sided Markets

Author

Listed:
  • Decarolis, Francesco
  • Li, Muxin

Abstract

We study a two-sided platform where a dominant gatekeeper supplies both a primary product and a competing ancillary service. By degrading outcomes for users of rival ancillary services, the gatekeeper engages in cross-market self-preferencing. Our theoretical model identifies when such behavior raises or lowers welfare, depending on buyers’ and sellers’ preferences and the platform’s pricing instruments. Analyzing a recent antitrust case against Google, we show that remedies targeting only one side can misalign incentives between different user groups, reducing welfare. Counterfactual simulations highlight when alternative behavioral or structural interventions realign incentives and improve market efficiency.

Suggested Citation

  • Decarolis, Francesco & Li, Muxin, 2025. "Gatekeepers and Self-Preferencing: Incentives and Welfare Trade-offs in Two-sided Markets," CEPR Discussion Papers 20668, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20668
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP20668
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    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:cpr:ceprdp:20668. 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: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    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.