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Price Discrimination against Multi-Clouders

Author

Listed:
  • Jihwan Do

    (Yonsei University)

  • Jeanine Miklos-Thal

    (University of Rochester)

Abstract

The cloud services industry, which is currently dominated by a few large providers, has come under scrutiny from antitrust authorities worldwide. One concern is that "egress fees"—charges for transferring data out of a provider's cloud-could harm competition and welfare by discouraging multi-clouding, whereby a user combines services from several providers. Motivated by this policy concern, we analyze the effects of banning price discrimination against multi-stop shoppers in a market where multi-product firms sell complementary goods to buyers with elastic demands, and multi-stop shoppers impose higher service costs than one-stop shoppers. We find that if buyers are locked into a specific product combination, then a ban on price discrimination against multi-stop shoppers raises social welfare for a wide range of demand functions. If product choices are endogenous and buyers' product preferences are weak, however, then a ban on price discrimination tends to harm social welfare.

Suggested Citation

  • Jihwan Do & Jeanine Miklos-Thal, 2025. "Price Discrimination against Multi-Clouders," Working papers 2025rwp-250, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2025rwp-250
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    References listed on IDEAS

    as
    1. Markus Dertwinkel‐Kalt & Christian Wey, 2023. "Third‐Degree Price Discrimination in Oligopoly when Markets are Covered," Journal of Industrial Economics, Wiley Blackwell, vol. 71(2), pages 464-490, June.
    2. David Genesove & Wallace P. Mullin, 1998. "Testing Static Oligopoly Models: Conduct and Cost in the Sugar Industry, 1890-1914," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 355-377, Summer.
    3. Adachi, Takanori, 2023. "A sufficient statistics approach for welfare analysis of oligopolistic third‐degree price discrimination," International Journal of Industrial Organization, Elsevier, vol. 86(C).
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