 Private labels in marketplacesRadostina Shopova International Journal of Industrial Organization, 2023, vol. 89, issue C Abstract: Regulators are concerned that by introducing their own private labels, dominant online marketplace operators distort competition in their own favor. This paper addresses this concern by studying how online marketplaces differ from classic retailers with a wholesale arrangement. In online marketplaces individual sellers set their own consumer prices, while the marketplace operator collects fees from their sales. I show that when introducing a private label, the marketplace operator does not have an incentive to distort competition and foreclose the outside seller. On the contrary, when introducing a private label, there is an incentive to decrease the fee charged to the outside seller and to vertically differentiate its own product in order to protect the seller’s channel. However, relative to the wholesale model of classic retailers, online marketplace operators offer a lower quality with higher consumer prices, leading to less improvement in consumer surplus and potentially less harm to the outside seller. Keywords: Online Marketplaces; Private Labels; Vertical Relations; Agency; Wholesale; Vertical Differentiation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:89:y:2023:i:c:s0167718723000309 DOI: 10.1016/j.ijindorg.2023.102949 Access Statistics for this article International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal More articles in International Journal of Industrial Organization from Elsevier |
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