Vertical Agreements and User Access

Germain Gaudin and Alexander White ()

American Economic Journal: Microeconomics, 2021, vol. 13, issue 3, 328-71

Abstract: Platforms acting as sales channels for producers often charge users for access via a subscription fee or a markup on hardware. We compare two common forms of vertical pricing agreement that platforms use with sellers: per unit and proportional fees. In particular, we analyze the critical role that user access plays on prices, profits, and welfare under both forms of agreement. We characterize this role and show how it potentially overturns standard results saying that proportional fees lead to lower prices and higher profits.

JEL-codes: D21 D43 K21 L22 L42 L86 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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DOI: 10.1257/mic.20180339

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