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Platform Price Parity Clauses with Direct Sales

Author

Listed:
  • BjØrn Olav Johansen

    (Department of Economics, University of Bergen)

  • Thibaud Vergé

    (CREST; ENSAE; Université Paris-Saclay; Norwegian School of Economics)

Abstract

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.

Suggested Citation

  • BjØrn Olav Johansen & Thibaud Vergé, 2017. "Platform Price Parity Clauses with Direct Sales," Working Papers 2017-45, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2017-45
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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