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Competition of E-Commerce Intermediaries

Author

Listed:
  • Alexander Matros

    (University of South Carolina)

  • Andriy Zapechelnyuk

    (Queen Mary, University of London)

Abstract

In e-commerce, where information collection is essentially costless and geographic location of traders matters very little, fierce competition between providers of similar services is expected. We consider a model where two e-commerce intermediaries (internet shops) compete for sellers. We show that two non-identical shops may coexist in equilibrium if the population of sellers is sufficiently differentiated in their time preferences. In such an equilibrium less patient sellers choose the more popular (with a higher rate of arrival of new buyers) and more expensive shop, while more patient sellers prefer the less popular and cheaper one.

Suggested Citation

  • Alexander Matros & Andriy Zapechelnyuk, 2010. "Competition of E-Commerce Intermediaries," Working Papers 675, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:675
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    References listed on IDEAS

    as
    1. Stahl, Dale O., 1996. "Oligopolistic pricing with heterogeneous consumer search," International Journal of Industrial Organization, Elsevier, vol. 14(2), pages 243-268.
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    More about this item

    Keywords

    E-commerce; Intermediary; Competition; Listing fee; Closing fee;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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