Activities per year
We consider a model of an on-line software market, where an intermediary distributes products from sellers to buyers. When products of sellers are vertically differentiated, an intermediary, earning a proportion of sales, has an incentive to hide the worse product on the second page, and only keep the better product on the front page: that weakens the competition, allowing the seller with the better product to charge a higher price. With heterogeneous visiting costs to the second page, the platform's revenue might improve, but the outcome will become socially suboptimal.
|Number of pages||20|
|Publication status||Published - 2013|
- menu choice
- imperfect monopolistic competition
- internet trade intermediation
- search costs
- horizontal differentiation
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