Welfare Implications of Personalized Pricing in Competitive Platform Markets: The Role of Network Effects

Lu, Qiuyu; Matsushima, Noriaki; Shekhar, Shiva

CESifo Working Papers, 2024, 10994

Number of Access:321（2025-07-24 04:37 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/95042

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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
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Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
CreatorName
Shekhar, Shiva
Subject
personalized pricing
uniform prices
two-sided market
content developers
Abstract
This study explores the welfare impact of personalized pricing for consumers in a duopolistic twosided 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
CESifo
Source Title
CESifo Working Papers
Volume (Issue)
10994
Date of Issued
2024-03-04
Handle URL
https://hdl.handle.net/11094/95042
eISSN
23641428
Relation.isIdenticalTo
URI
https://www.cesifo.org/en/publications/2024/working-paper/welfare-implications-personalized-pricing-competitive-platform
Access Rights
open access
oaire:version
Version of Record
Category
ディスカッション／ワーキング・ペーパー DP/WP