Net neutrality and welfare effects of discrimination on either or both the content side and the user side

Soo Jin Kim, Romain Lestage

We analyze the welfare effects of price discrimination by a monopolistic platform that mediates between two sides of a market. Discrimination is based on asymmetric costs on one side of the market and may be allowed on either or both sides. We show that unconstrained discrimination on both sides of the market improves welfare compared to uniform pricing but may be dominated by single-side discrimination. This result is driven by matching effects between sides, which add to the standard reallocation effects within sides

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Year of publication:	December 2, 2021
Authors:	Kim, Soo Jin ; Lestage, Romain
Publisher:	[Shanghai] : School of Entrepreneurship and Management, ShanghaiTech University
Subject:	Net Neutrality \| Zero-rating \| Price Discrimination \| Platform \| Network Effects \| Netzregulierung \| Access regulation \| Netzwerkökonomik \| Network economics \| Preisdifferenzierung \| Price discrimination \| Theorie \| Theory \| Wohlfahrtsanalyse \| Welfare analysis \| Internet \| Digitale Dienste \| Web-based service