Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226261
Authors: 
Choi, Jay Pil
Jeon, Doh-Shin
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8559
Abstract: 
We investigate the relationship between market structure and platforms' incentives to adopt technological innovations in two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider innovations that affect the two sides in an opposite way. We compare private incentives with social incentives and find that the bias in technology adoption depends crucially on whether the non-negative pricing constraint binds or not. Our results provide a rationale for a tougher competition policy to curb concentration if competition authorities put more weight on consumer surplus in welfare calculations.
Subjects: 
technology adoption
two-sided platforms
non-negative pricing constraint
pass-through
JEL: 
D40
L10
L50
Document Type: 
Working Paper

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