Data, Competition, and Digital Platforms

Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Data, Competition, and Digital Platforms 41 Pages Posted: 15 Oct 2022 See all articles by Dirk BergemannDirk BergemannYale University - Cowles Foundation - Department of Economics; Yale University - Cowles FoundationAlessandro BonattiMassachusetts Institute of Technology (MIT) - Sloan School of Management Date Written: September 27, 2022 Abstract We propose a model of intermediated digital markets where data and heterogeneity in tastes and products are defining features. A monopolist platform uses superior data to match consumers and multiproduct advertisers. Consumers have heterogenous preferences for the advertisers' product lines and shop on- or off-platform. The platform monetizes its data by selling targeted advertising space that allows advertisers to tailor their products to each consumer's preferences. We derive the equilibrium product lines and advertising prices. We identify search costs and informational advantages as two sources of the platform's bargaining power. We show that privacy-enhancing data-governance rules, such as those corresponding to federated learning, can lead to welfare gains for the consumers. Keywords: Data, Privacy, Data Governance, Digital Advertising, Competition, Digital Platforms, Digital Intermediaries, Personal Data, Matching, Price Discrimination JEL Classification: D18, D44, D82, D83 Suggested Citation: Suggested Citation Bergemann, Dirk and Bonatti, Alessandro, Data, Competition, and Digital Platforms (September 27, 2022). Available at SSRN: https://ssrn.com/abstract=4236337 Dirk Bergemann Yale University - Cowles Foundation - Department of Economics ( email ) 28 Hillhouse AveNew Haven, CT 06520-8268United States203-432-3592 (Phone)203-432-2128 (Fax) HOME PAGE: http://www.econ.yale.edu/~dirk/ Yale University - Cowles Foundation Box 208281New Haven, CT 06520-8281United States Alessandro Bonatti (Contact Author) Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email ) 100 Main StreetE62-416Cambridge, MA 02142United States Download This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? Place Job Opening Paper statistics Downloads 4 Abstract Views 16 PlumX Metrics Related eJournals IO: Theory eJournal Follow IO: Theory eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 928 PAPERS 14,996 Microeconomics: Production, Market Structure & Pricing eJournal Follow Microeconomics: Production, Market Structure & Pricing eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 762 PAPERS 16,453 Investments eJournal Follow Investments eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 227 PAPERS 2,582 Information Management eJournal Follow Information Management eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 60 PAPERS 1,623 Information Theory & Research eJournal Follow Information Theory & Research eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 59 PAPERS 644 Libraries & Information Technology eJournal Follow Libraries & Information Technology eJournal Subscribe to this fee journal for more curated articles on this topic FOLLOWERS 44 PAPERS 3,645 Feedback Feedback to SSRN Feedback (required) Email (required) Submit If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday. Submit a Paper Section 508 Text Only Pages SSRN Quick Links SSRN Solutions Research Paper Series Conference Papers Partners in Publishing Jobs & Announcements Newsletter Sign Up SSRN Rankings Top Papers Top Authors Top Organizations About SSRN SSRN Objectives Network Directors Presidential Letter Announcements Contact us FAQs Copyright Terms and Conditions Privacy Policy We use cookies to help provide and enhance our service and tailor content. To learn more, visit Cookie Settings. This page was processed by aws-apollo-5dc in 0.265 seconds