Research Details

Abstract

We consider platform competition when platforms can either 1) commercialize users’ data and in return offer their services for free (data-based business model); 2) protect users’ data and charge users for participation (subscription-based model); or 3) offer both options (the hybrid model). We find that competition does not always motivate the incumbent platform to protect users’ data. When data has a high public benefit (i.e., users get high benefits from data collected on other users), competition can motivate the incumbent to switch from the data-based to the subscription-based model. Yet, the opposite case occurs when the public benefit of data is small.

Type

Working Paper

Author(s)

Sarit Markovich, Yaron Yehezkel

Date Published

2024

Citations

Markovich, Sarit, and Yaron Yehezkel. 2024. Competing for cookies: Platforms’ business models in data markets with network effects.