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Data-Driven Mergers

Author

Listed:
  • Alexandre de Cornière

    (Toulouse School of Economics, University of Toulouse Capitole, 31000 Toulouse, France)

  • Greg Taylor

    (Oxford Internet Institute, University of Oxford, Oxford OX1 3JS, United Kingdom)

Abstract

We study mergers between firms operating in data-connected markets: the data generated as a byproduct of the activity in market A can be used by firms operating in market B . The effects of such a merger depend on whether data trade among independent firms is possible and whether data use benefits consumers or leads to more surplus extraction. When data increases product B ’s quality, the merger benefits consumers in both markets if data cannot be traded absent the merger and harms them otherwise. When data are used to extract consumer surplus in market B , the merger increases consumer surplus in market A and reduces it in market B .

Suggested Citation

  • Alexandre de Cornière & Greg Taylor, 2024. "Data-Driven Mergers," Management Science, INFORMS, vol. 70(9), pages 6473-6482, September.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:9:p:6473-6482
    DOI: 10.1287/mnsc.2023.04104
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