Price and quality decision of a monopoly platform for transaction with shipping

Tetsuya Shinkai () and Naoshi Doi

No 252-2, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper theoretically examines pricing and quality decisions of a monopoly platform facilitating transactions that involve physical shipping. In our model, the platform provides two types of transaction services (a standard service and a "premium" service with high-quality delivery of a transacted item) and decides a membership fee, transaction fees, and the quality of the premium service. We conduct comparative statics with respect to shipping costs. It is shown that when shipping costs are increased, the directions of changes in the platform's decision variables are ambiguous, depending on the nature of the increased shipping costs. For example, an increase in shipping costs may increase the quality and decrease the membership fee.

Keywords: Platform monopoly; Menu-pricing; Quality decisions; Two-sided market. (search for similar items in EconPapers)
JEL-codes: D21 D43 L13 L15 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-06, Revised 2023-07
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-reg
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http://192.218.163.163/RePEc/pdf/kgdp252-2.pdf First version, 2023 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:252-2

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