Article

Information Management and Pricing in Platform Markets

Bruno Jullien, and Alessandro Pavan

Abstract

We study platform markets in which the information about users' preferences is dispersed. First, we show how the dispersion of information introduces idiosyncratic uncertainty about participation decisions and how the latter shapes the elasticity of the demands and the equilibrium prices. We then study the effects on profits, consumer surplus, and welfare of platform design, blogs, forums, conferences, advertising campaigns, post-launch disclosures, and other information management policies affecting the agents' ability to predict participation decisions on the other side of the market.

Keywords

platform markets; dispersed information; design; information management; informative advertising; market ignition; global games;

JEL codes

  • D82: Asymmetric and Private Information • Mechanism Design

Replaces

Bruno Jullien, and Alessandro Pavan, Information Management and Pricing in Platform Markets, TSE Working Paper, n. 13-429, August 2013, revised November 2017.

Reference

Bruno Jullien, and Alessandro Pavan, Information Management and Pricing in Platform Markets, The Review of Economic Studies, vol. 86, n. 4, July 2019, pp. 1666–1703.

See also

Published in

The Review of Economic Studies, vol. 86, n. 4, July 2019, pp. 1666–1703