Premium
Data sharing agreements in vertically differentiated two‐sided markets
Author(s) -
SánchezCartas JuanManuel,
León Gonzalo
Publication year - 2020
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/ijet.12192
Subject(s) - incentive , vertical integration , business , microeconomics , market share , industrial organization , economics , marketing
We study the impact of data sharing agreements between two platforms with vertically differentiated consumers. We assume several utility functions to address the impact of those agreements under different market configurations. The results show that the follower always wants to share its network with the leader, while the leader has no incentive to share its network. We also prove that vertical two‐sided markets are quite prone to monopolies. Lastly, we show that regimes in which the leader shares its network are worse than not sharing at all.