Ershov, Daniel;
(2024)
Variety-Based Congestion in Online Markets: Evidence from Mobile Apps.
American Economic Journal: Microeconomics
(In press).
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Abstract
In many online markets, consumers have to spend time and effort browsing through products. The addition of new products could make other products less visible, creating congestion externalities. Using Android app store data, I take advantage of a natural experiment—a re-design of part of the store—to show evidence of congestion externalities online: more apps in the market directly reduce per-app usage/downloads. The natural experiment also increases long-run entry, but a structural demand model that accounts for congestion externalities suggests that forty percent of consumer variety welfare gains are lost from higher congestion.
| Type: | Article |
|---|---|
| Title: | Variety-Based Congestion in Online Markets: Evidence from Mobile Apps |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | https://www.aeaweb.org/articles?id=10.1257/mic.202... |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Congestion, mobile apps, online competition, entry |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10187767 |
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