Platform Pricing Structure and Moral Hazard

Roger, G; Vasconcelos, L

Platform Pricing Structure and Moral Hazard

Roger, G Vasconcelos, L

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Publication Type:: Journal Article
Citation:: Journal of Economics and Management Strategy, 2014, 23 (3), pp. 527 - 547
Issue Date:: 2014-01-01

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Field	Value	Language
dc.contributor.author	Roger, G	en_US
dc.contributor.author	Vasconcelos, L https://orcid.org/0000-0002-2952-5674	en_US
dc.date.issued	2014-01-01	en_US
dc.identifier.citation	Journal of Economics and Management Strategy, 2014, 23 (3), pp. 527 - 547	en_US
dc.identifier.issn	1058-6407	en_US
dc.identifier.uri	http://hdl.handle.net/10453/135747
dc.description.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. © 2014 Wiley Periodicals, Inc.	en_US
dc.relation.ispartof	Journal of Economics and Management Strategy	en_US
dc.relation.isbasedon	10.1111/jems.12059	en_US
dc.rights	info:eu-repo/semantics/openAccess
dc.subject.classification	Economics	en_US
dc.title	Platform Pricing Structure and Moral Hazard	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	23	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access	*
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	23	en_US

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. © 2014 Wiley Periodicals, Inc.

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http://hdl.handle.net/10453/135747