Working paper

Information Management and Pricing in Platform Markets

Bruno Jullien, and Alessandro Pavan

Abstract

We study monopoly and duopoly pricing in a two-sided market with dispersed information about users' preferences. We first show how the dispersion of information introduces idiosyncratic uncertainty about participation rates and how the latter shapes the elasticity of the demands and thereby the equilibrium prices. We then study informative advertising campaigns and product design affecting the agents' ability to estimate their own valuations and/or the distribution of valuations on the other side of the market.

Keywords

two-sided markets; dispersed information; platform competition; global-games; informative advertising;

JEL codes

  • D82: Asymmetric and Private Information • Mechanism Design

Replaced by

Bruno Jullien, and Alessandro Pavan, Information Management and Pricing in Platform Markets, The Review of Economic Studies, 2019, forthcoming.

Reference

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

Published in

TSE Working Paper, n. 13-429, August 2013, revised November 2017