Seller curation in platforms

Ben Casner

International Journal of Industrial Organization, 2020, vol. 72, issue C

Abstract: This article explores why market platforms do not expel low-quality sellers when screening costs are minimal. I model a platform market with consumer search. The presence of low-quality sellers reduces search intensity, softening competition between sellers and increasing the equilibrium market price. The platform admits some low-quality sellers if competition between sellers is intense. Recommending a high-quality seller and this form of search obfuscation are complementary strategies. The low-quality sellers enable the recommended seller to attract many consumers at a high price and the effect of the recommendation is strengthened as low-quality sellers become more adept at imitating high-quality sellers.

Keywords: Search obfuscation; Two-sided markets; Platforms; Screening; Recommendations (search for similar items in EconPapers)
JEL-codes: D21 D83 L15 L22 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:72:y:2020:i:c:s0167718720300825

DOI: 10.1016/j.ijindorg.2020.102659

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