Platform Governance

American Economic Journal: Microeconomics, Forthcoming

47 Pages Posted: 8 Feb 2020 Last revised: 25 Oct 2021

See all articles by Tat-How Teh

Tat-How Teh

Nanyang Technological University (NTU) - Division of Economics

Date Written: September 21, 2019

Abstract

Platforms that intermediate trades, such as Amazon, Airbnb, and eBay play a regulatory role in deciding how to govern the marketplaces they create. We propose a framework to analyze a platform's non-price governance designs and its incentive to act in a welfare-enhancing manner. We show that the platform's governance designs can be distorted towards inducing insufficient or excessive seller competition, depending on the nature of the fee instrument employed by the platform. These results are illustrated with micro-founded applications to a platform's control over seller entry, information provision and recommendations, quality standards, and search design choices.

Keywords: two-sided platform, platform designs, platform rules, business model

JEL Classification: L5, L15

Suggested Citation

Teh, Tat-How, Platform Governance (September 21, 2019). American Economic Journal: Microeconomics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3521026 or http://dx.doi.org/10.2139/ssrn.3521026

Tat-How Teh (Contact Author)

Nanyang Technological University (NTU) - Division of Economics ( email )

HSS 04-53, 14 Nanyang Drive
Singapore, 639798
Singapore

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