Consumers Welfare

This paper establishes that two-sided platforms have an incentive to strategically disclose (coarse) information about demand to the supply side as this can considerably boost their profits. However, this practice may also adversely affect the welfare of consumers. By optimally designing its information disclosure policy, a platform can influence the entry and pricing decisions of its potential suppliers. On the other hand, consumers may end up being worse off as they have access to fewer trading options and/or face higher prices compared to when the platform refrains from sharing any demand information to its potential suppliers.