REAL

Deceptive Features on Platforms

Johnen, Johnen and Somogyi, Róbert (2024) Deceptive Features on Platforms. ECONOMIC JOURNAL, 134 (662). pp. 2470-2493. ISSN 0013-0133

[img]
Preview
Text
ueae016.pdf - Published Version
Available under License Creative Commons Attribution.

Download (788kB) | Preview

Abstract

Many products sold on online platforms have additional features like fees for services, shipping, luggage, upgrades etc. We study when a two-sided platform shrouds additional features towards potentially-naive buyers. We explore a novel mechanism according to which platforms shroud to manipulate network externalities between buyers and sellers. Exploring this mechanism, we argue the advent of online marketplaces led to less-transparent markets. First, platforms have stronger incentives to shroud seller fees than sellers themselves. Second, platforms shroud their own fees less if they earn more revenue from sellers; so when sellers on the platform compete more fiercely, platforms—somewhat perversely—shroud more. We connect these results to many applications and the current debate on regulating online platforms.

Item Type: Article
Uncontrolled Keywords: D18 - Consumer Protection, D47 - Market Design, D83 - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness, L15 - Information and Product Quality; Standardization and Compatibility
Subjects: H Social Sciences / társadalomtudományok > HB Economic Theory / közgazdaságtudomány
SWORD Depositor: MTMT SWORD
Depositing User: MTMT SWORD
Date Deposited: 23 Aug 2024 07:28
Last Modified: 23 Aug 2024 07:28
URI: https://real.mtak.hu/id/eprint/203196

Actions (login required)

Edit Item Edit Item