We examine the profitability and welfare implications of targeted price discrimination in two-sided markets. First, we show that equilibrium discriminatory prices exhibit novel features relative to discriminatory prices in one-sided models and uniform prices in two-sided models. Second, we...

We investigate the effect of competition on price dispersion in the airline industry. Using panel data from 1993 to 2008, we find a non-monotonic effect of competition on price dispersion. An increase in competition is associated with greater price dispersion in concentrated markets but is...

We introduce a flexible framework by modeling the information firms possess about consumers' locations (preferences) on the Salop circle as a partition. Higher information quality is translated into a partition refinement. In the limit, we obtain the perfect price discrimination paradigm. We...

We propose a new location model where consumers are allowed to make multiple purchases (i.e., one unit from each firm). This model may fit many markets (e.g., newspapers, credit cards) better than existing models. A common feature of these markets is that some consumers are loyal to one brand,...

An interesting feature of the data is that the price distribution in the absence of promotional activities first order stochastically dominates that under display or feature advertising. The theoretical model we introduce can yield an equilibrium that is consistent with the above observations

The recent literature on oligopolistic third-degree price discrimination has been primarily concerned with rival firms' incentives to acquire customer-specific information and the consequences of such information on firm profitability and welfare. This literature has taken mostly a static view...

We employ the assignment game of Shapley and Shubik (1972) to study the endogenous matching patterns in a market that consists of heterogenous principals and agents. We show that, in general, the equilibrium matching is non-assortative. We then characterize the equilibrium relationship between...

We examine the incentives and implications of supplier encroachment, when production of the final product requires multiple complementary inputs and each firm is specialized in the production of one input. Entry of a supplier into the final product market gives rise to cross-supply of inputs. We...