Digital platforms' strategies: price parity, information provision and data sharing

This research aims to investigate the effects of different platform strategies and mandatory policies on main market outcomes. In the first chapter, We have developed a theoretical model in order to contribute to the ongoing literature on showrooming and PPC and for providing policy relevant conclusions. With our work, we have determined firms pricing strategies within a multi-channel sales strategy context. We have defined how an increase in the share of initial consumers (shoppers/web-shoppers) in a given channel makes competition relatively fiercer in that channel. The distribution of initial consumers across channels affects platforms' pricing strategies. In particular, we have found that the larger is the share of initial consumers in the direct channel (shoppers), the harder is for platforms to attract users. In line with the literature, a PPC reduces the inter-channel competition so platform can raise their fee level and profits. Nevertheless, platforms' pricing strategy is constrained by the possibility of the firms to delist and sell exclusively in the direct sales channel. Consumers are better off in the unrestricted pricing scenario always but when the share of shoppers is very large. This leads to an overall ambiguous effect on total welfare. Indeed when platforms are not very differentiated, and the cost of buying in the direct channel is high, price parity clauses generate higher total welfare. These interesting results help understanding why banning price parity clauses is not always welfare-improving and indicate what authorities should analyze in order to evaluate the effects of a PPC ban. In the second chapter, we investigate the incentive of a hybrid platform to commit in information sharing when information is verifiable by sellers in order to understand the impact of this strategy on consumer surplus and total welfare. Surprisingly, we find that platforms have strong incentives to share full information with sellers despite the dual mode because of the coordination effect it generates. Information provision results on average in more surplus extraction by firms and platforms, thus it lowers both consumer surplus and total welfare. In the third chapter, we investigate the effects of mandated data sharing on market outcomes and social welfare when data can be used for different purposes (price discrimination or cost reduction). Although the aggregate effect is usually positive, we argue that under certain conditions, mandatory data sharing may damage the very agents it is intended to protect, namely consumers and (efficient) sellers.