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Data-Driven Mergers

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  • de Cornière, Alexandre
  • Taylor, Greg

Abstract

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

Suggested Citation

  • de Cornière, Alexandre & Taylor, Greg, 2024. "Data-Driven Mergers," TSE Working Papers 24-1576, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:129733
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    References listed on IDEAS

    as
    1. Jin-Hyuk Kim & Liad Wagman, 2015. "Screening incentives and privacy protection in financial markets: a theoretical and empirical analysis," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 1-22, March.
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