 First-party selling and self-preferencingFlorian Dendorfer International Journal of Industrial Organization, 2024, vol. 97, issue C Abstract: In this paper, I analyze the welfare effect of a vertically integrated gatekeeper platform selling its own first-party product, i.e., first-party selling, as well as the platform's incentive to favor the first-party product in the product recommendations it makes, i.e., self-preferencing. I find that, irrespective of self-preferencing, both consumer welfare and platform revenue are higher under first-party selling because first-party selling mitigates double marginalization. Additionally, third-party product prices are lower in expected terms under first-party selling, either because the platform reduces the commission fee (with self-preferencing) or downstream competition is fiercer (without self-preferencing). Finally, I show that both consumers and the platform are better off if the platform commits not to engage in self-preferencing. Keywords: Double marginalization; Platform; Regulation; Self-preferencing; Steering; Vertical foreclosure; Vertical integration (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:97:y:2024:i:c:s0167718724000535 DOI: 10.1016/j.ijindorg.2024.103098 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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