@article{9d4e1aceebb94b20aa1215d087b01abe,
title = "Data-driven mergers and personalization",
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.",
keywords = "big data, big data, personalization, tech mergers",
author = "Zhijun Chen and Chongwoo Choe and Jiajia Cong and Noriaki Matsushima",
note = "Funding Information: We thank the editor, Gary Biglaiser, and two anonymous referees for many valuable comments and suggestions. We are also grateful to Arthur Campbell, Greg Crawford, Jacques Cr{\'e}mer, Doh‐Shin Jeon, Bruno Jullien, Paul Heidhues, Vai‐Lam Mui, Patrick Rey, Susumu Sato, Greg Taylor, Tommaso Valletti, Chengsi Wang, Xiaojian Zhao, and the audience at Monash IO seminar (Monash University, October 2020), the Economics of Platforms seminar (TSE Digital Center, November 2020), and JEA 2021 Spring Meeting (Kwansei Gakuin University, May 2021) for constructive comments and feedback. We gratefully acknowledge financial support from the Australian Research Council (grant number DP210102015), the Japan Society for the Promotion of Science (KAKENHI grant numbers JP15H05728, JP17H00984, JP18H00847, JP18K01593, JP19H01483, JP20H05631), Osaka University for its International Joint Research Promotion Program, and the program of the Joint Usage/Research Center for “Behavioral Economics” at the ISER, Osaka University. Cong would like to acknowledge the financial support from National Natural Science Foundation of China (Project number 72003035). The usual disclaimer applies. Publisher Copyright: {\textcopyright} 2022 The Authors. The RAND Journal of Economics published by Wiley Periodicals LLC on behalf of The RAND Corporation",
year = "2022",
doi = "10.1111/1756-2171.12398",
language = "English",
volume = "53",
pages = "3--31",
journal = "RAND Journal of Economics",
issn = "0741-6261",
publisher = "Wiley-Blackwell",
number = "1",
}