Eeckhout, Jan; Veldkamp, Laura - National Bureau of Economic Research - 2022
Might firms' use of data create market power? To explore this hypothesis, we craft a model in which economies of scale … in data induce a data-rich firm to invest in producing at a lower marginal cost and larger scale. However, the model … uncovers much richer interactions between data, welfare and market power. Data affects risk, firm size and the composition of …