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DTSTART:20251026T030000
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UID:calendar.137644.field_date.0@www.tse-fr.eu
DTSTAMP:20260512T031707Z
CREATED:20250708T131002Z
DESCRIPTION:Susumu Sato (Hitotsubashi University)\, “Economics of Seller Op
 t-Out and the Pricing of Auxiliary Services”\, Industrial Organization sem
 inar\, TSE\, September 29\, 2025\, 14:15–15:30\, room Auditorium 4.\n\nMan
 y platforms charge percentage commissions on third-party sales. They may a
 lso charge per unit fees on ancillary services (such as FbA for Amazon's s
 hipping and warehousing)\, and they may authorize (or be obliged) to offer
  seller opt-out of such services. We analyze the economics of these option
 s and obligations. We derive and leverage a version of the Lerner equation
  to describe platform equilibrium pricing of ancillary services as a funct
 ion of its commission rate and product demand elasticity. The formula read
 ily extends to describe pricing when seller opt-out is available\, and inc
 orporates the elasticity of alternative supply. We show that ancillary ser
 vices are priced higher under tied sales than opt-out than platform cost w
 hen commission rates exceed a threshold\, so then the platform uses the an
 cillary good as a revenue source. Sellers and buyers then suffer from the 
 tying of ancillary services. These results completely reverse when the com
 mission rate exceeds the threshold. The ancillary good is then subsidized 
 in order to mitigate third-party pricing magnification effects of double m
 arginalization due to the commission rate inflating effective marginal cos
 t. In this case\, the platform has no incentive to tie ancillary services\
 , but sellers and consumers may benefit from tying. With these insights\, 
 we then endogenize the commision rate. We show that it always induces a su
 bsidy for ancillary services. When the regulator can control pricing of an
 cillary services (but not commission rates)\, we show that it has no reaso
 n to do so if its objective is maximal consumer surplus (platform incentiv
 es are fully aligned with consumers)\, but seller surplus is maximized by 
 raising ancillary price to marginal cost! Conversely\, capping commission 
 rates (when the regulator cannot control ancillary prices) improves both c
 onsumer and seller surpluses.
DTSTART;TZID=Europe/Paris:20250929T151500
DTEND;TZID=Europe/Paris:20250929T163000
LAST-MODIFIED:20260113T095129Z
LOCATION:TSE\, September 29\, 2025\, 14:15–15:30\, room Auditorium 4
SUMMARY:Industrial Organization seminar
URL;TYPE=URI:https://www.tse-fr.eu/seminars/2025-economics-seller-opt-out-a
 nd-pricing-auxiliary-services
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