Project

Who benefits from increased competition among sellers on B2C platforms?

Goal:
We introduce within-group external effects in the two-sided sin glehoming model of Armstrong (2006). First, we propose a general characterization of the platform access fees at the symmetric equilibrium of the game. Second, we combine this general formulation with a specific modeling of the relationship between buyers and sellers on B2C platforms, so as to analyze how changes in the underlying characteristics of the product market affect the equilibrium of the game. We show that an increase in the number of sellers may benefit sellers while hurting buyers. We also show that sellers and buyers prefer full product differentiation while platforms prefer no differentiation.

Updates
0 new
2
Recommendations
0 new
0
Followers
0 new
24
Reads
0 new
153

Project log

Paul Belleflamme
added an update
The paper is now published in Research in Economics. See
 
Paul Belleflamme
added an update
The paper is now accepted (and available online) at Research in Economics. See http://www.sciencedirect.com/science/article/pii/S1090944316301727
 
Paul Belleflamme
added a project goal
We introduce within-group external effects in the two-sided sin glehoming model of Armstrong (2006). First, we propose a general characterization of the platform access fees at the symmetric equilibrium of the game. Second, we combine this general formulation with a specific modeling of the relationship between buyers and sellers on B2C platforms, so as to analyze how changes in the underlying characteristics of the product market affect the equilibrium of the game. We show that an increase in the number of sellers may benefit sellers while hurting buyers. We also show that sellers and buyers prefer full product differentiation while platforms prefer no differentiation.