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Information provision in hybrid platforms

Marco Magnani () and Federico Navarra ()
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Marco Magnani: University of Padova and ARERA
Federico Navarra: University of Padova

No 301, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: We study the incentives of a monopolistic hybrid platform in sharing its superior market information with the third-party seller hosted on its marketplace. After observing platform information-sharing policy, the seller competes in prices with the platform over a horizontally differentiated good. Despite platform duality, an equilibrium in which the platform shares information with the seller occurs. We highlight how the platform has incentives to share information either for relaxing price-competition or for increasing the volume of transactions. Platform incentives to share information are strongest for intermediate degrees of product differentiation. Information provision results in consumer surplus extraction such that the total welfare is reduced. Although entering as a seller and providing market information is profitable, when analysing platform entry as the acquisition of one of the sellers we may observe equilibria in which the platform either sticks to agency or does not provide information since this would increase the entry cost.

Keywords: hybrid platforms; information provision; data sharing; vertical integration. (search for similar items in EconPapers)
Pages: 30 pages
Date: 2023-05
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mfd, nep-mic, nep-pay and nep-reg
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