This paper studies the ambiguous welfare effects of compatibility in a platform market with endogenous content provision. Compatibility can be particularly harmful if it leads to reduced content but can be beneficial if content is sufficiently increased.

In a bargaining setting with asymmetrically informed, inequity-averse parties, a fully efficient mechanism (i.e., the double auction) exists if and only if compassion is strong. Less compassionate parties do not trade in the double auction in the limit of strong envy.