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Resale price maintenance in two-sided markets

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In many two-sided markets, platforms use intermediary agents to reach consumers at one side of the market. In addition to the usual externalities in two-sided markets, the use of agents creates an additional externality for the platforms. We study if and how competing platforms can internalize the externalities by imposing resale price maintenance (RPM) on the agents. By the appropriate use of RPM, the platforms can induce the fully integrated outcome. Using a speci…c example, we show that consumers’surplus is reduced when the equilibrium involves the use of minimum RPM, and consumers benefi…t when maximum RPM is used.

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  • Gabrielsen, Tommy S. & Johansen, Bjørn Olav & Lømo, Teis L., 2015. "Resale price maintenance in two-sided markets," Working Papers in Economics 08/15, University of Bergen, Department of Economics.
    • Handle: RePEc:hhs:bergec:2015_008
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    Cited by:

    1. Dertwinkel-Kalt, Markus & Wey, Christian, 2023. "Resale price maintenance in a successive monopoly model," DICE Discussion Papers 395, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Dertwinkel-Kalt, Markus & Wey, Christian, 2021. "Multi-Product Pricing and Minimum Resale Price Maintenance," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242338, Verein für Socialpolitik / German Economic Association.
    3. Kind, Hans Jarle & Nilssen, Tore & Sørgard, Lars, 2016. "Inter-firm price coordination in a two-sided market," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 101-112.
    4. Lømo, Teis Lunde & Meland, Frode & Sandvik, Håvard Mork, 2020. "Do slotting allowances reduce product variety?," Working Papers in Economics 7/20, University of Bergen, Department of Economics.

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    More about this item

    Keywords

    Two-sided markets; resale price maintenance;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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