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Second-Degree Price Discrimination on Two-Sided Markets

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  • Böhme, Enrico

Abstract

The present paper provides a descriptive analysis of the second-degree price discrimination problem on a monopolistic two-sided market. By imposing a simple two-sided framework with two distinct types of agents on one of its market sides, it will be shown that under incomplete information, the extent of platform access for high-demand agents is strictly reduced below the benchmark level (complete information). In addition, the paper’s findings imply that it is feasible in the optimum to charge higher payments from low-demand agents if the extent of interaction with agents from the opposite market side is assumed to be bundle-specific.

Suggested Citation

  • Böhme, Enrico, 2012. "Second-Degree Price Discrimination on Two-Sided Markets," MPRA Paper 40951, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40951
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    References listed on IDEAS

    as
    1. Board, Simon, 2009. "Monopolistic group design with peer effects," Theoretical Economics, Econometric Society, vol. 4(1), March.
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    20. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
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    Cited by:

    1. Jeon, Doh-Shin & Kim, Byung-Cheol & Menicucci, Domenico, 2016. "Second-degree Price Discrimination by a Two-sided Monopoly Platform," TSE Working Papers 16-690, Toulouse School of Economics (TSE), revised Aug 2017.

    More about this item

    Keywords

    two-sided markets; second-degree price discrimination; monopoly;

    JEL classification:

    • 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
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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