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Information provision in hybrid platforms

Author

Listed:
  • Marco Magnani

    (University of Padova and ARERA)

  • Federico Navarra

    (University of Padova)

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.

Suggested Citation

  • Marco Magnani & Federico Navarra, 2023. "Information provision in hybrid platforms," "Marco Fanno" Working Papers 0301, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0301
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    File URL: https://economia.unipd.it/sites/economia.unipd.it/files/20230301.pdf
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    Cited by:

    1. Federico Etro, 2023. "e-Commerce Platforms and Self-preferencing," Working Papers - Economics wp2023_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

    More about this item

    Keywords

    hybrid platforms; information provision; data sharing; vertical integration.;
    All these keywords.

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