Prominence of store-brand products in an electronic platform

Hui Song ()
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Hui Song: Guangdong University of Foreign Studies

Journal of Economics, 2021, vol. 133, issue 1, No 3, 47-83

Abstract: Abstract This paper uses a search model to study the competition between a store brand and a third-party brand in a platform. Consumers sample products in a sequential ordering. Sampling cost is crucial for determining product orderings. We find that, the platform prefers making the third-party brand prominent when the outside market is closed, and generally prefers making the store brand prominent when there are infinitely many firms in the outside market. The difference in product ordering can be attributed to the strength of competition-intensifying effect and market-expansion effect. Generally speaking, the platform’s choice lowers down consumer surplus and social welfare.

Keywords: Consumer search; Store brand; Search bias (search for similar items in EconPapers)
JEL-codes: D42 D83 L12 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:133:y:2021:i:1:d:10.1007_s00712-020-00726-4

DOI: 10.1007/s00712-020-00726-4

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