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Joint-purchase benefits as an anti-steering device of platforms

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  • Sato, Susumu

Abstract

This study develops a stylized model in which a cross-market complementarity (e.g., volume discounts or rewards across categories) provided by a platform plays a role of anti-steering device. The complementarity across markets locks consumers into the platform and makes it hard for individual third-party sellers to divert consumers to direct channels. Accordingly, the platform can profitably raise the commission by increasing the cross-market complementarity. The platform’s incentive to invest in cross-market complementarity is excessive. The application to cross-market merger shows that a merger that generates a cross-market synergy may be harmful to consumers and welfare.

Suggested Citation

  • Sato, Susumu, 2022. "Joint-purchase benefits as an anti-steering device of platforms," Economics Letters, Elsevier, vol. 215(C).
    • Handle: RePEc:eee:ecolet:v:215:y:2022:i:c:s016517652200129x
    DOI: 10.1016/j.econlet.2022.110504
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    References listed on IDEAS

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    Cited by:

    1. Dipankar Das, 2023. "A Model of Competitive Assortment Planning Algorithm," Papers 2307.09479, arXiv.org.

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