Competition of E-Commerce Intermediaries

Alexander Matros and Andriy Zapechelnyuk

No 675, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: In e-commerce, where information collection is essentially costless and geographic location of traders matters very little, fierce competition between providers of similar services is expected. We consider a model where two e-commerce intermediaries (internet shops) compete for sellers. We show that two non-identical shops may coexist in equilibrium if the population of sellers is sufficiently differentiated in their time preferences. In such an equilibrium less patient sellers choose the more popular (with a higher rate of arrival of new buyers) and more expensive shop, while more patient sellers prefer the less popular and cheaper one.

Keywords: E-commerce; Intermediary; Competition; Listing fee; Closing fee (search for similar items in EconPapers)
JEL-codes: C73 D43 D82 (search for similar items in EconPapers)
Date: 2010-11-01
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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:675

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