Joint-purchase benefits as an anti-steering device of platforms

Susumu Sato

Economics Letters, 2022, vol. 215, issue C

Abstract: This study develops a stylized model in which a cross-market complementarity (e.g., volume discounts or rewards across categories) provided by a platform plays a role of anti-steering device. The complementarity across markets locks consumers into the platform and makes it hard for individual third-party sellers to divert consumers to direct channels. Accordingly, the platform can profitably raise the commission by increasing the cross-market complementarity. The platform’s incentive to invest in cross-market complementarity is excessive. The application to cross-market merger shows that a merger that generates a cross-market synergy may be harmful to consumers and welfare.

Keywords: Joint-purchase benefits; Anti-steering; Excessive investment; Platform merger (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:215:y:2022:i:c:s016517652200129x

DOI: 10.1016/j.econlet.2022.110504

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