Antitrust and Consumer Protection
Competition: Fall 2020, Vol 30, No. 2
Content
- Ai and Interdependent Pricing: Combination Without Conspiracy?
- Big Data and Antitrust Risks In Close-up: From the Perspective of Real Cases
- Blockchain Technology: a Future Antitrust Target?
- Chair's Column
- Digital Platform Competition, Merger Control, and the Incentive To Innovate: Don't Kill the Goose That Lays the Golden Egg
- Editor's Note
- Fourth Annual "Celebrating Women In Competition Law In California"
- It's High Tide Again In Internet Markets
- Masthead
- Privacy, Pricing, and the Value of Consumer Data: the Complex Nature of the Ccpa's Non-discrimination Requirement
- The Ftaia's "Domestic Effects" Exception: Why the Ninth Circuit Got It Right
- The Simple Economics of Hybrid Marketplaces
THE SIMPLE ECONOMICS OF HYBRID MARKETPLACES
By Neil Dryden, Sergey Khodjamirian, and Jorge Padilla1
ABSTRACT
This article explains that that the decision of a marketplace to operate its own reseller in competition with third-party sellers within the platform is likely to spur competition to the ultimate benefit of consumers. A marketplace will profit by supplying directly as a reseller when that duality is needed to (a) achieve selection parity with other distribution channels and/or (b) prod third-party sellers to compete more aggressively. The success of a hybrid marketplace (i.e., an online business that is both a marketplace and a reseller operating in that marketplace) may require it to support its retail operations in order to increase the appeal of its store vis-à-vis other stores. The effect of such strategy on the incentives to innovate of other sellers in the marketplace is in principle ambiguous but the available evidence suggests it may be positive.
KEYWORDS: antitrust, business models, hybrid marketplaces, regulation