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Resale price maintenance in two-sided markets

Tommy Gabrielsen (), Bjørn Olav Johansen () and Teis L. Lømo ()
Additional contact information
Teis L. Lømo: Department of Economics, University of Bergen, Postal: Post Box 7800, 5020 Bergen, http://www.uib.no/en/persons/Teis.Lunde.L%C3%B8mo

No 08/15, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: In many two-sided markets, platforms use intermediary agents to reach consumers at one side of the market. In addition to the usual externalities in two-sided markets, the use of agents creates an additional externality for the platforms. We study if and how competing platforms can internalize the externalities by imposing resale price maintenance (RPM) on the agents. By the appropriate use of RPM, the platforms can induce the fully integrated outcome. Using a speci…c example, we show that consumers’surplus is reduced when the equilibrium involves the use of minimum RPM, and consumers benefi…t when maximum RPM is used.

Keywords: Two-sided markets; resale price maintenance (search for similar items in EconPapers)
JEL-codes: L13 L41 L42 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2015-11-25
New Economics Papers: this item is included in nep-com, nep-mic, nep-mkt and nep-net
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Journal Article: Resale Price Maintenance In Two‐Sided Markets (2018) Downloads
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