Amazon Entry on Amazon Marketplace

Gregory Crawford, Matteo Courthoud, Regina Seibel and Simon Zuzek

No 17531, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: There is an active policy debate seeking to understand whether Amazon first-party entry in competition with third-party merchants harms these merchants, and ultimately consumers, on Amazon Marketplace. Some argue that the exploitation of third-party data permits seller expropriation and reduces innovation while others claim that such entry permits the internalization of important externalities, benefiting consumers and merchants alike. We seek to inform this debate by measuring the predictors and effects of Amazon first-party retail entry on consumer and third-party merchant outcomes in the Home & Kitchen department of Germany’s Marketplace between 2016 and 2021. We find Amazon entry both within and across products is associated with modest positive effects on both consumer and third-party merchant outcomes more consistent with mild market expansion than with appropriating third-party sales. We find that both Amazon and large third-party merchants’ entry is associated with fewer subsequent new product introductions, but that these are consistent with regression to the mean rather than causal effects on innovation. Finally, we find that the predictors of Amazon’s within-product entry decisions are more consistent with a strategy that makes Marketplace more attractive to consumers than of third-party seller expropriation, including consideration of predictors based on aggregated Marketplace data. While the empirical setting presented challenges for estimating causal effects, our results are broadly inconsistent with systematic adverse effects of Amazon entry on Amazon Marketplace.

Keywords: Entry; Digital platforms; Expropriation; Marketplace; Amazon; Hybrid Platforms (search for similar items in EconPapers)
Date: 2022-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17531 (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:17531

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17531

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 ().