EconPapers    
Economics at your fingertips  
 

Platform Competition, Vertical Differentiation, and Price Coherence

Heiko Gerlach and Junqian Li

Journal of Law and Economics, 2021, vol. 64, issue 3, 439 - 477

Abstract: This paper analyzes merchants’ price coherence in two-sided markets with vertically differentiated platforms. When merchants are unable to charge different prices to consumers who purchase their products using different platforms, fee competition among platforms becomes more intense on both sides of the market. We show that with unrestricted prices, platforms compete for market share, while with price coherence, they compete for the entire sales of a merchant. As a consequence, price coherence can reduce total platform fees, increase consumer surplus, and raise total welfare. We also compare private and social incentives of a platform-merchant pair to impose price coherence, and we explore the effects of price coherence on investment incentives.

Date: 2021
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.1086/713453 (application/pdf)
http://dx.doi.org/10.1086/713453 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/713453

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

 
Page updated 2022-03-29
Handle: RePEc:ucp:jlawec:doi:10.1086/713453