Why is Platform Pricing Generally Highly Skewed?


Bolt and Tieman (2008) suggested that profit function non-concavities may account for the prevalence of skewed pricing by two-sided platform businesses. In the Rochet-Tirole (2003) model, however non-concavity is not necessary for highly skewed pricing. Ubiquitous high pass-through rates are sufficient but implausible. In the Armstrong (2006) model, non… (More)

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