We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Platform Pricing Structure and Moral Hazard.
- Authors
Roger, Guillaume; Vasconcelos, Luís
- 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.
- Subjects
PRICING; MORAL hazard; STOCK exchanges; MARKETPLACES; APPLICATION stores
- Publication
Journal of Economics & Management Strategy, 2014, Vol 23, Issue 3, p527
- ISSN
1058-6407
- Publication type
Article
- DOI
10.1111/jems.12059