Platform-Intermediated Trade with Uncertain Quality/Comment/Comment

Consider trade conducted via a platform, such as an online app store or a farmers' market. The quality sellers choose for their products affects the surplus trade generates. Because the platform's profit depends on that surplus, the platform can have an incentive to regulate quality. This...

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Bibliographic Details
Published in:Journal of institutional and theoretical economics 2016-03, Vol.172 (1), p.5-39
Main Authors: Hermalin, Benjamin E, Göller, Daniel, Daughety, Andrew F, Reinganum, Jennifer F
Format: Article
Language:English
Subjects:
Farmers markets
Greece
Product quality
Studies
Vendors
Online Access:Get full text
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Summary:Consider trade conducted via a platform, such as an online app store or a farmers' market. The quality sellers choose for their products affects the surplus trade generates. Because the platform's profit depends on that surplus, the platform can have an incentive to regulate quality. This is true even if quality is observable at time of purchase or if sellers can develop reputations concerning quality. It is also true if the platform charges sellers only; that is, even if the platform has no direct interest in buyers' well-being. (JEL: L14, L15, L22)
ISSN:0932-4569
1614-0559
DOI:10.1628/093245616X14464471185955