Private labels in marketplaces
- Author(s)
- Radostina Shopova
- Abstract
Regulators are concerned that by introducing their own private labels, dominant online marketplace operators distort competition in their own favor. This paper addresses this concern by studying how online marketplaces differ from classic retailers with a wholesale arrangement. In online marketplaces individual sellers set their own consumer prices, while the marketplace operator collects fees from their sales. I show that when introducing a private label, the marketplace operator does not have an incentive to distort competition and foreclose the outside seller. On the contrary, when introducing a private label, there is an incentive to decrease the fee charged to the outside seller and to vertically differentiate its own product in order to protect the seller's channel. However, relative to the wholesale model of classic retailers, online marketplace operators offer a lower quality with higher consumer prices, leading to less improvement in consumer surplus and potentially less harm to the outside seller.
- Organisation(s)
- Department of Economics
- Journal
- International Journal of Industrial Organization
- Volume
- 89
- ISSN
- 0167-7187
- DOI
- https://doi.org/10.1016/j.ijindorg.2023.102949
- Publication date
- 03-2023
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics, 502021 Microeconomics
- Keywords
- ASJC Scopus subject areas
- Aerospace Engineering, Economics and Econometrics, Economics, Econometrics and Finance (miscellaneous), Industrial relations, Industrial and Manufacturing Engineering, Strategy and Management
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/private-labels-in-marketplaces(1599e144-7913-4e7a-bef6-eb62212f23fd).html