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Platform Governance†

Platform Governance† AbstractPlatforms that intermediate trades—such as Amazon, Airbnb, and eBay—play a regulatory role in deciding how to govern the marketplaces  they create. We propose a framework to analyze a platform’s nonprice governance design and its incentive to act in a welfare-enhancing manner. We show that the platform’s governance design can be distorted toward inducing insufficient or excessive seller competition, depending on the nature of the fee instrument employed by the platform. These results are illustrated with micro-founded applications to a platform’s control over seller entry, information provision and recommendations, quality standards, and search-design choices. (JEL D21, D83, L15, L23, L81, M37) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Platform Governance†

Platform Governance†

American Economic Journal: Microeconomics , Volume 14 (3) – Aug 1, 2022

Abstract

AbstractPlatforms that intermediate trades—such as Amazon, Airbnb, and eBay—play a regulatory role in deciding how to govern the marketplaces  they create. We propose a framework to analyze a platform’s nonprice governance design and its incentive to act in a welfare-enhancing manner. We show that the platform’s governance design can be distorted toward inducing insufficient or excessive seller competition, depending on the nature of the fee instrument employed by the platform. These results are illustrated with micro-founded applications to a platform’s control over seller entry, information provision and recommendations, quality standards, and search-design choices. (JEL D21, D83, L15, L23, L81, M37)

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Publisher
American Economic Association
Copyright
Copyright © 2022 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20190307
Publisher site
See Article on Publisher Site

Abstract

AbstractPlatforms that intermediate trades—such as Amazon, Airbnb, and eBay—play a regulatory role in deciding how to govern the marketplaces  they create. We propose a framework to analyze a platform’s nonprice governance design and its incentive to act in a welfare-enhancing manner. We show that the platform’s governance design can be distorted toward inducing insufficient or excessive seller competition, depending on the nature of the fee instrument employed by the platform. These results are illustrated with micro-founded applications to a platform’s control over seller entry, information provision and recommendations, quality standards, and search-design choices. (JEL D21, D83, L15, L23, L81, M37)

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Aug 1, 2022

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