Competing for Cookies: Platforms' Business Models in Data Markets with Network Effects

• 成果类型: Article; Early Access
• 署名作者: Markovich, Sarit; Yehezkel, Yaron
• 署名单位: Northwestern University; Tel Aviv University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2024.07744
• 发表日期: 2025
• 关键词: platforms with network effects; BUSINESS MODELS; data commercialization

摘要

We consider platform competition when platforms can (1) commercialize users' data and in return offer their services for free (data-based business model); (2) protect users' privacy 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' privacy. When network effects are intermediate, competition can motivate the incumbent to shift from the subscription-based model to the hybrid model, thereby increasing data commercialization. Yet, the opposite case occurs when network effects are weak. Moreover, allowing the incumbent to adopt the hybrid model is welfare enhancing when network effects are strong and welfare reducing (or neutral) otherwise.