Online Shopping and Platform Design with Ex Ante Registration Requirements

Florian Morath and Johannes Muenster

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We study platform design in online markets in which buying involves a (non-monetary) cost for consumers caused by privacy and security concerns. Firms decide whether to require registration at their website before consumers learn the price and all relevant product information. We show that a monopoly seller requires ex ante registration in equilibrium if and only if the consumersÂ’registration cost is sufficiently low. This result extends to the case of price competition. We also show that discounts (store credit) can increase the share of consumers who register and hence a firm's profit even though discounts affect the equilibrium price.

Keywords: E-commerce; Privacy concerns; Security concerns; Registration cost; Platform design; Price competition; Information (search for similar items in EconPapers)
JEL-codes: D42 D43 D82 D83 L81 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-12
New Economics Papers: this item is included in nep-com and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.tax.mpg.de/RePEc/mpi/wpaper/TAX-MPG-RPS-2014-21.pdf Full text (original version) (application/pdf)

Related works:
Journal Article: Online Shopping and Platform Design with Ex Ante Registration Requirements (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mpi:wpaper:tax-mpg-rps-2014-21

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