Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets

We examine the equilibrium interaction between a market for price information (controlled by a gatekeeper) and the homogenous product market it serves. The gatekeeper charges fees to ...rms that advertise prices on its Internet site and to consumers who access the list of advertised prices. Gatekeeper pro...ts are maximized in an equilibrium where (a) the product market exhibits price dispersion; (b) access fees are su¢ciently low that all consumers subscribe; (c) advertising fees exceed socially optimal levels, thus inducing partial ...rm participation; and (d) advertised prices are below unadvertised prices. Introducing the market for information has ambiguous social welfare e¤ects. JEL Numbers: D4, D8, M3, L13;