A Note on Price Regulation in Two-Sided Markets

21 Pages Posted: 11 Jul 2019

See all articles by Soheil R. Nadimi

Soheil R. Nadimi

affiliation not provided to SSRN

Dennis Weisman

Kansas State University - Department of Economics

Date Written: July 10, 2019

Abstract

This paper examines price level regulation in two-sided markets with linear demands. We find that (i) price level regulation increases the price allocation asymmetry when reservation prices differ between the two sides of the market; and (ii) changes in the level of the price cap are divided equally between the two sides of the market whether demands are symmetric or asymmetric. Finally, and potentially important from a policy perspective, the numerical simulations suggest that the efficiency gains from price level regulation are relatively modest for a wide range of cost parameters.

Keywords: two-sided markets, price allocations, regulation, efficiency

Suggested Citation

Nadimi, Soheil R. and Weisman, Dennis, A Note on Price Regulation in Two-Sided Markets (July 10, 2019). Available at SSRN: https://ssrn.com/abstract=3417919 or http://dx.doi.org/10.2139/ssrn.3417919

Soheil R. Nadimi

affiliation not provided to SSRN

Dennis Weisman (Contact Author)

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

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