Abstract
Online intermediaries greatly expand consumer information, but also raise sellers’ marginal costs by charging high commissions. To prevent disintermediation, some platforms adopted price parity and anti-steering provisions, which restrict sellers’ ability to use alternative sales channels. Whether to uphold, reform, or ban these provisions has been at the center of the policy debate, but, so far, little consensus has emerged. As an alternative, this paper studies how to cap platforms’ commissions. The utilitarian cap reflects the Pigouvian precept according to which the platform should charge net fees no greater than the informational externality it exerts on other market participants.
Keywords
platforms, price parity; regulation; commission caps; extreme value theory;
JEL codes
- D83: Search • Learning • Information and Knowledge • Communication • Belief
- L10: General
- L41: Monopolization • Horizontal Anticompetitive Practices
Reference
Renato Gomes, and Andrea Mantovani, “Regulating Platform Fees under Price Parity”, TSE Working Paper, n. 22-1325, March 2022.
See also
Published in
TSE Working Paper, n. 22-1325, March 2022