Thursday, June 14, 2018
Andreea Cosnita-Langlais ; Bjørn Olav Johansen ; and Lars Sorgard study Upward Price Pressure in Two-Sided Markets: Incorporating Feedback Effects.
ABSTRACT: In two-sided markets it is important to consider feedback effects following a merger, i.e. how a price change on one side of the market affects the price change on the other side of the market. Affeldt et al. (2013) introduced the Upward Pricing Pressure (UPP) for two-sided markets, and we extend their approach to take into account such feedback effects. We then discuss the implications of our results for the assessment of two-sided mergers.