Platform price parity clauses with direct sales

Bjørn Olav Johansen () and Thibaud Vergé ()
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Thibaud Vergé: CREST, ENSAE, Université Paris-Saclay and Norwegian School of Economics

No 01/17, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: In the context of vertical contractual relationships, where competing sellers distribute their products directly as well as through competing intermediation platforms, we analyze the welfare effects of price parity clauses. These contractual clauses prevent a seller from offering its product at a lower price on other platforms or through its own direct sales channel. Recently, they have been the subject of several antitrust investigations. Contrary to the theories of harm developed by competition agencies and in some of the recent literature, we show that when we account for the sellers’ participation constraints, price parity clauses do not always lead to higher commissions and final prices. Instead, we find that they may simultaneously bene.t all the actors (platforms, sellers and consumers), even in the absence of traditional efficiency arguments.

Keywords: Vertical contracts; price parity clauses; platforms; endogenous participation (search for similar items in EconPapers)
JEL-codes: L13 L42 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017-01-27
New Economics Papers: this item is included in nep-com, nep-cta, nep-ind, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Working Paper: Platform Price Parity Clauses with Direct Sales (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:bergec:2017_001

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