Welfare implications of personalized pricing in competitive platform markets : The role of network effects

Lu, Qiuyu; Matsushima, Noriaki; Shekhar, Shiva

OSIPP Discussion Paper, 2025, DP-2025-E-003, 1-31

Number of Access:32（2025-07-24 04:20 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/102073

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Title
Welfare implications of personalized pricing in competitive platform markets : The role of network effects
Creator
CreatorName
Lu, Qiuyu
NRID
1000080334879 1000080334879
ORCID
0000-0002-7865-3875 0000-0002-7865-3875
researchmap permalink
read0116301 read0116301
Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
CreatorName
Shekhar, Shiva
Subject
Personalized pricing
Uniform prices
Two-sided market
Content developers
JEL
L13
D43
M21
Abstract
This study explores the welfare impact of personalized pricing for consumers in a duopolistic two-sided market, with consumers single-homing and developers affiliating with a platform according to their outside option. Personalized pricing, which is private in nature, cannot influence expectations regarding the network sizes, inducing the platforms to offer lower participation fees for developers. Those lower fees increase network benefits for consumers, allowing the platforms to exploit these benefits through personalized pricing. Personalized prices are higher when the network value for developers is high, benefiting competing platforms at the expense of consumers. These findings offer policy insights on personalized pricing.
Publisher
Osaka School of International Public Policy, The University of Osaka
Source Title
OSIPP Discussion Paper
Volume (Issue)
DP-2025-E-003
Page
1-31
Date of Issued
2025-07-01
Language
English
Handle URL
https://hdl.handle.net/11094/102073
Relation.references
URI
https://www.osipp.osaka-u.ac.jp/archives/DP/2025/DP2025E003.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
OSIPP Discussion Paper