Retailer-led Marketplaces

Andres Hervas-Drane and Sandro Shelegia

No 17351, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Leading retailers have opened up their online storefronts to competitors by operating marketplaces for third party sellers. We develop a model of entry and price competition at the product market level, and show that the retailer softens competition through control of the storefront and beneï¬ ts from third party sellers by learning about products and mitigating his own capacity constraints. We examine policy interventions and ï¬ nd that regulation of marketplace fees has the strongest potential to increase welfare outcomes. Our model provides novel insights into the mechanisms at play in retailer-led marketplaces and explains their prominent role in online retail.

Keywords: Product entry; Price competition; Marketplace fees; Buy box; Observational learning; Product assortment (search for similar items in EconPapers)
JEL-codes: D40 L10 L25 L42 L81 (search for similar items in EconPapers)
Date: 2022-06
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP17351 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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:cpr:ceprdp:17351

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17351

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().