Data-Driven Mergers and Personalization

Zhijun Chen; Chongwoo Choe; Jiajia Cong; Noriaki Matsushima

doi:10.1111/1756-2171.12398

Data-Driven Mergers and Personalization

Zhijun Chen
, Chongwoo Choe
, Jiajia Cong
, Noriaki Matsushima

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

31 Citations (Scopus)

30 Downloads (CityUHK Scholars)

Abstract

This article studies tech mergers that involve a large volume of consumer data. The merger links the markets for data collection and data application through a consumption synergy. The merger-specific efficiency gains exist in the market for data application due to the consumption synergy and data-enabled personalization. Prices fall in the market for data collection but generally rise in the market for data application as the efficiency gains are extracted away through personalized pricing. When the consumption synergy is large enough, the merger can result in monopolization of both markets. We discuss policy implications including various merger remedies.

© 2022 The Authors. The RAND Journal of Economics published by Wiley Periodicals LLC on behalf of The RAND Corporation

Original language	English
Pages (from-to)	3-31
Journal	RAND Journal of Economics
Volume	53
Issue number	1
Online published	21 Jan 2022
DOIs	https://doi.org/10.1111/1756-2171.12398
Publication status	Published - 2022
Externally published	Yes

Publisher's Copyright Statement

This full text is made available under CC-BY 4.0. https://creativecommons.org/licenses/by/4.0/

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AB - This article studies tech mergers that involve a large volume of consumer data. The merger links the markets for data collection and data application through a consumption synergy. The merger-specific efficiency gains exist in the market for data application due to the consumption synergy and data-enabled personalization. Prices fall in the market for data collection but generally rise in the market for data application as the efficiency gains are extracted away through personalized pricing. When the consumption synergy is large enough, the merger can result in monopolization of both markets. We discuss policy implications including various merger remedies. © 2022 The Authors. The RAND Journal of Economics published by Wiley Periodicals LLC on behalf of The RAND Corporation

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Data-Driven Mergers and Personalization

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