Roger, G and Vasconcelos, LI (2014) Platform Pricing Structure and Moral Hazard. Journal of Economics & Management Strategy, 23 (3). pp. 527-547. DOI https://doi.org/10.1111/jems.12059
Roger, G and Vasconcelos, LI (2014) Platform Pricing Structure and Moral Hazard. Journal of Economics & Management Strategy, 23 (3). pp. 527-547. DOI https://doi.org/10.1111/jems.12059
Roger, G and Vasconcelos, LI (2014) Platform Pricing Structure and Moral Hazard. Journal of Economics & Management Strategy, 23 (3). pp. 527-547. DOI https://doi.org/10.1111/jems.12059
Abstract
We study pricing by a two-sided platform when it faces moral hazard on the sellers' side. In doing so, we introduce an equilibrium notion of platform reputation in an infinite horizon model. We find that with transaction fees only, the platform cannot eliminate the loss of reputation induced by moral hazard. If registration fees can be levied, moral hazard can be overcome. The registration fee determines the participation threshold of sellers and extracts them, whereas (lower) transaction fees provide incentives for good behavior. This provides a motivation for platforms to use registration fees in addition to transaction fees.
Item Type: | Article |
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Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 14 Jan 2015 15:20 |
Last Modified: | 24 Oct 2024 19:32 |
URI: | http://repository.essex.ac.uk/id/eprint/12310 |
Available files
Filename: Platform_reputation.pdf