Work

Data and Competition: A Simple Framework

Year: 2025

Type: article

Abstract: ABSTRACT Does enhanced access to data foster or hinder competition among firms? Using a competition‐in‐utility framework that encompasses many situations where firms use data, we model data as a revenue‐shifter and identify two opposite effects: a mark‐up effect according to which data induces firms to compete harder, and a surplus‐extraction effect. We provide conditions for data to be pro‐ or anti‐competitive, requiring neither knowledge of demand nor computation of equilibrium. We apply our results to situations where data is used to recommend products, monitor insuree behavior, price‐discriminate, or target advertising. We also revisit the issue of data and market structure.

Source: The RAND Journal of Economics

DOI: 10.1111/1756-2171.70020

Authors: Alexandre de Cornière, Greg Taylor

Institutions: Toulouse School of Economics, Université de Toulouse, Université Toulouse Capitole, University of Oxford

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,400

Funder: Agence Nationale de la Recherche