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Data sales and data dilution

delete2025-07-01
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PRE
AI
E
Ernest Liu
S
Song Ma *
L
Laura Veldkamp
DOI：10.1016/j.jfineco.2025.104053delete
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Abstract

Abstract

En 中文
We explore indicators of market power in a data market. Markups cannot measure competition, because most data products' marginal cost is zero, making the markup infinite. Yet, data monopolists may not exert monopoly power because they cannot commit to restricting data sales to future customers. This limited commitment and strategic substitutability of data undermine sellers' monopoly power. But data subscriptions restore this monopoly power. Evidence from online data markets supports the model's insight that subscriptions indicate market power. Model and evidence reveal that data subscriptions are better for consumers because they sustain the incentive to invest in high-quality data.
Keywords:
Market power
Data markets
Data economy
Technological change
Market structure

Journal

Journal of Financial Economics cover
Journal of Financial Economics
IF:
12
Papers:
3.8K
Citations:
5.5W

Organization

No organization information available