Entry deterrence by exploiting economies of scope in data aggregation

Fuente: arXiv
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Autori principali: Guijarro, Luis, Vidal, José-Ramón, Pla, Vicent
Natura: Preprint
Pubblicazione: 2025
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author Guijarro, Luis
Vidal, José-Ramón
Pla, Vicent
author_facet Guijarro, Luis
Vidal, José-Ramón
Pla, Vicent
contents We model a market for data where an incumbent and a challenger compete for data from a producer. The incumbent has access to an exclusive data producer, and it uses this exclusive access, together with economies of scope in the aggregation of the data, as a strategy against the potential entry by the challenger. We assess the incumbent incentives to either deter or accommodate the entry of the challenger. We show that the incumbent will accommodate when the exclusive access is costly and when the economies of scope are low, and it will blockade or deter otherwise. The results would justify an access regulation that incentivizes the entry of the challenger, e.g., by increasing production costs for the exclusive data.
format Preprint
id arxiv_https___arxiv_org_abs_2501_07235
institution arXiv
publishDate 2025
record_format arxiv
spellingShingle Entry deterrence by exploiting economies of scope in data aggregation
Guijarro, Luis
Vidal, José-Ramón
Pla, Vicent
Theoretical Economics
We model a market for data where an incumbent and a challenger compete for data from a producer. The incumbent has access to an exclusive data producer, and it uses this exclusive access, together with economies of scope in the aggregation of the data, as a strategy against the potential entry by the challenger. We assess the incumbent incentives to either deter or accommodate the entry of the challenger. We show that the incumbent will accommodate when the exclusive access is costly and when the economies of scope are low, and it will blockade or deter otherwise. The results would justify an access regulation that incentivizes the entry of the challenger, e.g., by increasing production costs for the exclusive data.
title Entry deterrence by exploiting economies of scope in data aggregation
topic Theoretical Economics
url https://arxiv.org/abs/2501.07235