Platform Design Biases in Ad-Funded Two-Sided Markets - Archive ouverte HAL
Article Dans Une Revue RAND Journal of Economics Année : 2023

Platform Design Biases in Ad-Funded Two-Sided Markets

Résumé

We investigate how platform market power affects platforms' design choices in ad-funded two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and extract surplus on the advertising side. We consider design choices affecting both sides in opposite ways and compare private incentives with social incentives. Platforms' design biases depend crucially on whether they can charge any price on the consumer side. We apply the framework to technology adoption, privacy, and ad load choices. Our results provide a rationale for a tougher competition policy to curb market power of ad-funded platforms with free services.
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hal-04470490 , version 1 (21-02-2024)

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Jay Pil Choi, Doh-Shin Jeon. Platform Design Biases in Ad-Funded Two-Sided Markets. RAND Journal of Economics, 2023, 54 (2), pp.240-267. ⟨10.1111/1756-2171.12436⟩. ⟨hal-04470490⟩
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