Retail Platform Bias?

By George S. Ford (Phoenix Center for Advanced Legal & Economic Public Policy Studies) & Michael Stern (Auburn University)

We offer a simple analysis of a digital platform’s incentives to bias sales toward its own products and services. The analysis reveals that a digital platform is less biased – not more biased – in the promotion of its own products and services relative to online sellers that do not permit third-party sales. Every seller has an incentive to promote its own products, but the presence of a platform component to the seller’s business reduces that incentive.

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