IDEAS home Printed from https://ideas.repec.org/a/spr/jbecon/v94y2024i3d10.1007_s11573-023-01174-4.html
   My bibliography  Save this article

Market entry as a marketplace owner: when and why should you sell on your marketplace?

Author

Listed:
  • Jürgen Rösch

    (Bauhaus-University)

Abstract

The new Digital Market Act (DMA) of the European Union imposes stricter rules on gatekeeper platforms. While this affects only a few very large platforms, the discussion surrounding the implementation of the DMA offers valuable insights into the strategic behaviors of those gatekeeper platforms. A gatekeeper platform, for example, may enter its platform as a supplier, which may hurt existing third-party suppliers and restrict fair competition on the platform. This paper flips the academic discussion on whether marketplace owners should be allowed to sell on their marketplaces. It illustrates why this behavior is profitable for gatekeepers and how marketplace owners can apply this knowledge to improve their business models. The paper identifies five situations in which becoming a supplier in one’s marketplace can be profitable, but it also proposes alternative solutions to entering the market.

Suggested Citation

  • Jürgen Rösch, 2024. "Market entry as a marketplace owner: when and why should you sell on your marketplace?," Journal of Business Economics, Springer, vol. 94(3), pages 525-541, April.
  • Handle: RePEc:spr:jbecon:v:94:y:2024:i:3:d:10.1007_s11573-023-01174-4
    DOI: 10.1007/s11573-023-01174-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11573-023-01174-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s11573-023-01174-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Susan Athey & Michael Luca, 2019. "Economists (and Economics) in Tech Companies," Journal of Economic Perspectives, American Economic Association, vol. 33(1), pages 209-230, Winter.
    2. Alexandre de Cornière & Greg Taylor, 2019. "A model of biased intermediation," RAND Journal of Economics, RAND Corporation, vol. 50(4), pages 854-882, December.
    3. Belleflamme,Paul & Peitz,Martin, 2021. "The Economics of Platforms," Cambridge Books, Cambridge University Press, number 9781108710749, Enero.
    4. Yusuke Zennyo, 2022. "Platform Encroachment and Own‐Content Bias," Journal of Industrial Economics, Wiley Blackwell, vol. 70(3), pages 684-710, September.
    5. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    6. Jens-Uwe Franck & Martin Peitz, 2021. "Market Definition in the Platform Economy," CRC TR 224 Discussion Paper Series crctr224_2021_259v2, University of Bonn and University of Mannheim, Germany.
    7. Dewenter Ralf & Rösch Jürgen, 2016. "Net Neutrality and the Incentives (Not) to Exclude Competitors," Review of Economics, De Gruyter, vol. 67(2), pages 209-229, August.
    8. Daniele Condorelli & Jorge Padilla, 2020. "Harnessing Platform Envelopment in the Digital World," Journal of Competition Law and Economics, Oxford University Press, vol. 16(2), pages 143-187.
    9. Jorge Padilla & Joe Perkins & Salvatore Piccolo, 2020. "Self-Preferencing in Markets with Vertically-Integrated Gatekeeper Platforms," CSEF Working Papers 582, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    11. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    12. Federico Etro, 2021. "Product selection in online marketplaces," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(3), pages 614-637, August.
    13. Belleflamme, Paul & Peitz, Martin, 2021. "The Economics of Platforms : Concepts and Strategy," LIDAM Reprints CORE 3185, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. Andrei Hagiu & Tat‐How Teh & Julian Wright, 2022. "Should platforms be allowed to sell on their own marketplaces?," RAND Journal of Economics, RAND Corporation, vol. 53(2), pages 297-327, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Peitz, 2025. "Governance and Regulation of Platforms," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, edition 0, chapter 23, pages 565-593, Springer.
    2. Yassine Lefouili & Leonardo Madio, 2022. "The economics of platform liability," European Journal of Law and Economics, Springer, vol. 53(3), pages 319-351, June.
    3. Steffen, Nico & Wiewiorra, Lukas & Kroon, Peter, 2021. "Wettbewerb und Regulierung in der Plattform- und Datenökonomie," WIK Discussion Papers 481, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    4. Martin Peitz, 2024. "The Economic Theory of Two-Sided Platforms," CRC TR 224 Discussion Paper Series crctr224_2024_584, University of Bonn and University of Mannheim, Germany.
    5. Tetsuya Shinkai & Naoshi Doi, 2023. "Price and quality decision of a monopoly platform for transaction with shipping," Discussion Paper Series 252-2, School of Economics, Kwansei Gakuin University, revised Jul 2023.
    6. Zennyo, Yusuke, 2024. "A model of mobile app and ad platform markets," International Journal of Industrial Organization, Elsevier, vol. 97(C).
    7. Michael Peneder & Sandra Bilek-Steindl & Susanne Bärenthaler-Sieber & Julia Bock-Schappelwein & Alexandros Charos, 2025. "Business Use of Online Platforms: Competition, Satisfaction and Willingness to Pay," WIFO Working Papers 701, WIFO.
    8. Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
    9. Tetsuya Shinkai & Naoshi Doi, 2023. "Menu-pricing and Quality Decisions of a Platform Monopolist," Discussion Paper Series 252, School of Economics, Kwansei Gakuin University.
    10. Federico Etro, 2024. "e‐Commerce platforms and self‐preferencing," Journal of Economic Surveys, Wiley Blackwell, vol. 38(4), pages 1516-1543, September.
    11. Jacobides, Michael G. & Cennamo, Carmelo & Gawer, Annabelle, 2024. "Externalities and complementarities in platforms and ecosystems: From structural solutions to endogenous failures," Research Policy, Elsevier, vol. 53(1).
    12. Etro, Federico, 2023. "Platform competition with free entry of sellers," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    13. Francesco Angelini & Massimiliano Castellani & Lorenzo Zirulia, 2025. "Platform investment and seller competition in two-sided markets," Journal of Economics, Springer, vol. 144(1), pages 1-29, January.
    14. Luis Guijarro & Vicent Pla & Jose Ramon Vidal, 2024. "ISP pricing and Platform pricing interaction under net neutrality," Papers 2401.14791, arXiv.org.
    15. Christian Bach & Robert Edwards & Christian Jaag, 2023. "Postal Platform Pricing with Limited Consumer Attention," Working Papers 202318, University of Liverpool, Department of Economics.
    16. Jullien, Bruno & Sand-Zantman, Wilfried, 2021. "The Economics of Platforms: A Theory Guide for Competition Policy," Information Economics and Policy, Elsevier, vol. 54(C).
    17. Ester Manna & Alessandro De Chiara & Fernando Gómez & Juan-José Ganuza, 2023. "Platform Liability with Reputational Sanctions," Working Papers 1403, Barcelona School of Economics.
    18. Etro, Federico, 2021. "Device-funded vs ad-funded platforms," International Journal of Industrial Organization, Elsevier, vol. 75(C).
    19. Anderson, Simon & Bedre-Defolie, Özlem, 2022. "Online trade platforms: Hosting, selling, or both?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 84, pages 1-15.
    20. Muthers Johannes & Wismer Sebastian, 2022. "Why Do Platforms Charge Proportional Fees? Commitment and Seller Participation," Review of Network Economics, De Gruyter, vol. 21(2), pages 83-110, August.

    More about this item

    Keywords

    Digital platforms; Digital Market Act; Self-preferencing; Market-entry; Marketplaces;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jbecon:v:94:y:2024:i:3:d:10.1007_s11573-023-01174-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.