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Intermediated vs. Direct Sales and a No-Discrimination Rule

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  • Sebastian Wismer

Abstract

When sellers join a platform to sell their products, the platform operator may restrict their strategic decisions. In fact, several platform operators impose most-favored treatment or no-discrimination rules (NDRs), asking sellers not to offer better sales conditions elsewhere. In this paper, I analyze a model that allows for an endogenous split-up of consumers between sales channels. Competing sellers might set different prices across channels, depending on the platform tariff and presence of aNDR. I find that the platform operator imposes a NDR if he faces high transaction costs, if seller competition is weak, and if the initial distribution of consumers on channels is strongly skewed. Prohibiting NDRs can have both positive and negative effects on welfare.

Suggested Citation

  • Sebastian Wismer, 2013. "Intermediated vs. Direct Sales and a No-Discrimination Rule," Working Papers 131, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:131_wismer
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    Cited by:

    1. Wang Cong & Yang Huifang & Yang Deli, 2019. "The Influence of Third-party E-Commerce Platform Price Limits on the Dual-Channel Strategy of Manufacturers," Journal of Systems Science and Information, De Gruyter, vol. 7(2), pages 173-186, April.
    2. Johansen, Bjørn Olav & Vergé, Thibaud, 2017. "Platform price parity clauses with direct sales," Working Papers in Economics 01/17, University of Bergen, Department of Economics.
    3. Hongyan Li & Shiming Deng, 2019. "A game-theoretical analysis of joint-rebate strategies in platform-based retailing systems," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 7(1), pages 117-150, May.

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    More about this item

    Keywords

    Intermediation; Platform pricing; No-discrimination rule;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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