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Article Dans Une Revue European Journal of Law and Economics Année : 2023

Data portability and competition: Can data portability increase both consumer surplus and profits?

Résumé

We study how data portability affects consumer surplus and firms’ profits in a two-period model with a switching cost where two firms compete under a non-negative pricing constraint. The firms can circumvent the constraint by tying another complementary free service (called ”freebies”) with the original service. We consider a general framework of incomplete pass-through of freebies into consumer benefit, which includes the two extreme cases of no pass-through and full pass-through as special cases. Regarding the effect on consumer surplus, data portability involves a trade-off between intensifying competition after consumer lock-in and reducing rent dissipation before consumer lock-in. We find that for an intermediate range of pass-through rates, data portability increases both consumer surplus and profits.

Dates et versions

hal-04216623 , version 1 (25-09-2023)

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Doh-Shin Jeon, Domenico Menicucci. Data portability and competition: Can data portability increase both consumer surplus and profits?. European Journal of Law and Economics, 2023, ⟨10.1007/s10657-023-09774-9⟩. ⟨hal-04216623⟩
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