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Exogenous shocks in the informational level of a subset of consumers may affect the market structure, equilibrium and welfare. Information platforms (e.g. Yelp, Airbnb) provide information about experience goods, such as restaurants and lodging. Their existence may cause an heterogeneity in the level of information available to potential consumers, depending on their access to the platform. This study fosters our understanding of how information platforms impacted competition, profits and welfare. Using a spokes model of horizontal competition, I show that platforms may enhance welfare by increasing the value of realised transactions (better matching) and by increasing the size of the market. However, they may also enable producers to extract a larger share of surplus and variety may decrease. Therefore, consumers are always ex ante better off with the platform,
however some of them will be worse off ex post, for their preferred variety has disappeared.
