A Model of Non-Stationary Dynamic Price Competition with an Application to Platform Design

Andrew Sweeting

No 15-03, Working Papers from NET Institute

Abstract: I develop a tractable framework for conducting platform design counterfactuals in settings where many sellers compete and set prices dynamically, using approaches developed in the recent literature on Oblivious Equilibria. As an initial application, I use the model to study a simple platform design counterfactual using data from the secondary event ticket market on Stubhub.com where the perishability of the product being sold results in sellers facing a dynamic and non-stationary pricing problem. Currently, most transactions happen at low prices close to the event. Motivated by some simple theoretical examples, I investigate how the dynamics of prices, the timing of transactions, platform revenues and participant surplus would be a affected if a commission structure that encouraged earlier transactions was introduced.

Keywords: dynamic pricing; platform; non-stationary equilibrium; perishable goods (search for similar items in EconPapers)
JEL-codes: C57 C63 C7 L11 L13 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2015-09
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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