Platform Price Parity Clauses with Direct Sales

We analyze the effects of price parity clauses in a setting where competing sellers distribute their products directly as well as through competing platforms. These clauses prevent a seller from offering its product at a lower price on other platforms or through its own direct sales channel. We show that when we account for the sellers? participation constraints, price parity clauses do not always lead to higher commissions and ?final prices. Instead, we fi?nd that they may simultaneously bene?fit all the actors (platforms, sellers and consumers), even in the absence of traditional efficiency arguments.