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Intermediated vs. Direct Sales and a No-Discrimination Rule


  • Sebastian Wismer


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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    References listed on IDEAS

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    Cited by:

    1. BjØrn Olav Johansen & Thibaud Vergé, 2016. "Platform Price Parity Clauses with Direct Sales," Working Papers 2017-45, Center for Research in Economics and Statistics, revised 01 Sep 2016.

    More about this item


    Intermediation; Platform pricing; No-discrimination rule;

    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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