On Sellers' Collusion in E-Commerce Marketplaces

36 Pages Posted: 9 Mar 2021

See all articles by Michele Bisceglia

Michele Bisceglia

University of Toulouse 1 - Toulouse School of Economics (TSE); University of Bergamo - Department of Management, Economics and Quantitative Methods

Date Written: March 6, 2021

Abstract

Motivated by a recent competition policy debate on retailers' collusion in online marketplaces, this paper studies a simple model to shed light on the competitive and welfare effects of this conduct. I find that, when retailers sell their products through a monopolistic e-commerce platform, consumers are not necessarily harmed by their collusive behaviour. Specifically, if the platform adopts the agency model and is vertically integrated (i.e., sells a private label in competition with third-party sellers), a cartel between third-party sellers induces it to charge them lower fees and to set a lower price for its private label. As a consequence, when products are sufficiently homogeneous, also the cartel members charge lower prices compared to the non-cooperative equilibrium, and collusion benefits consumers and increases total welfare. Notably, these results hold even though the platform has all the bargaining power vis-à-vis (competing or colluding) third-party sellers, and they collude explicitly.

Keywords: Antitrust, Collusion, E-Commerce Platform, Vertically Integrated Platform

JEL Classification: L13, L41, L81

Suggested Citation

Bisceglia, Michele and Bisceglia, Michele, On Sellers' Collusion in E-Commerce Marketplaces (March 6, 2021). Available at SSRN: https://ssrn.com/abstract=3799092 or http://dx.doi.org/10.2139/ssrn.3799092

Michele Bisceglia (Contact Author)

University of Bergamo - Department of Management, Economics and Quantitative Methods ( email )

Salvecchio 19
Bergamo, 24129
Italy

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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