Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73405
Authors: 
Wismer, Sebastian
Year of Publication: 
2013
Series/Report no.: 
BGPE Discussion Paper 131
Abstract: 
When sellers join a platform to sell their products, the platform operator may restrict their strategic decisions. In fact, several platform operators impose most-favored treatment or no-discrimination rules (NDRs), asking sellers not to offer better sales conditions elsewhere. In this paper, I analyze a model that allows for an endogenous split-up of consumers between sales channels. Competing sellers might set different prices across channels, depending on the platform tariff and presence of aNDR. I find that the platform operator imposes a NDR if he faces high transaction costs, if seller competition is weak, and if the initial distribution of consumers on channels is strongly skewed. Prohibiting NDRs can have both positive and negative effects on welfare.
Subjects: 
Intermediation
Platform pricing
No-discrimination rule
JEL: 
D40
L42
L81
Document Type: 
Working Paper

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