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Platform MFN Clauses and Complementary Services

Author

Listed:
  • Jong-Hee Hahn

    (Yonsei University)

  • Seongkyun Kim

    (Software Policy & Research Institute)

Abstract

This paper examines the welfare effects of most-favored-nation (MFN) clauses in markets where platforms not only act as intermediaries but also compete to offer auxiliary services such as delivery. Analyzing a linear demand model in which platforms set both transaction and service fees, we show that although MFNs intensify competition for service fees, their tendency to elevate transaction fees dominates, reducing aggregate transaction volume and thereby diminishing consumer surplus and overall welfare. This result holds for asymmetric platforms, provided all remain active in the market, and is robust to changes in the intensity of platform competition.

Suggested Citation

  • Jong-Hee Hahn & Seongkyun Kim, 2026. "Platform MFN Clauses and Complementary Services," Working papers 2026rwp-281, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2026rwp-281
    as

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    References listed on IDEAS

    as
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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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