Vertical Integration and Consumer Choice: Evidence from a Field Experiment

Chiara Farronato, Andrey Fradkin and Alexander MacKay

No 34135, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Digital platforms offer consumers vertically integrated products alongside third-party alternatives. Using a field experiment that hides Amazon brands, we quantify the impacts of vertical integration—through both the availability of private labels and their placement in search results. In their absence, consumers choose similar products with no increase in search effort or cross-platform substitution. Yet some consumers prefer Amazon brands, and removing these products reduces consumer welfare by 5.5 percent. Contrary to concerns about self-preferencing, demoting Amazon brands in search results does not increase welfare, as heterogeneous preferences make their prominent placement valuable to a meaningful share of consumers.

JEL-codes: C93 D12 K21 L13 L40 L81 (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-com, nep-exp, nep-ind and nep-reg
Note: IO PR
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34135.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

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:nbr:nberwo:34135

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34135
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().