IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_12749.html

Regulating Platform Bias: Self-Preferencing and Transaction Fees as Strategic Substitutes

Author

Listed:
  • Chang-Koo Chi
  • Jay Pil Choi
  • Jong-Hee Hahn
  • Seongkyun Kim

Abstract

This paper studies self-preferencing incentives by vertically integrated platforms that operate both marketplaces and affiliated retail businesses. We show that self-preferencing and transaction fees are substitute instruments for profit extraction, implying that restrictions on self-preferencing may induce offsetting increases in transaction fees and thereby generate unintended consequences for consumer welfare. We characterize the platform’s optimal choice of self-preferencing and transaction fees and evaluate the welfare effects of behavioral and structural remedies. We also extend the analysis to settings with platform competition and consumer search, examining how market forces shape self-preferencing incentives and evaluating the robustness of our main results.

Suggested Citation

  • Chang-Koo Chi & Jay Pil Choi & Jong-Hee Hahn & Seongkyun Kim, 2026. "Regulating Platform Bias: Self-Preferencing and Transaction Fees as Strategic Substitutes," CESifo Working Paper Series 12749, CESifo.
    • Handle: RePEc:ces:ceswps:_12749
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/cesifo1_wp12749.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • D2 - Microeconomics - - Production and Organizations
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    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:ces:ceswps:_12749. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    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.