Optimal product placement

Hsu, Chia-Ling, Matta, Rafael, Popov, Sergey V. ORCID: https://orcid.org/0000-0001-6899-9293 and Sogo, Takeharu 2017. Optimal product placement. Review of Industrial Organization 51 (1) , pp. 127-145. 10.1007/s11151-017-9575-y

Preview

PDF - Published Version Available under License Creative Commons Attribution. Download (508kB) | Preview

Abstract

We model a market, such as an online software market, in which an intermediary connects sellers and buyers by displaying sellers’ products. With two vertically-differentiated products, an intermediary can place either: (1) one product, not necessarily the better one, on the first page, and the other hidden on the second page; or (2) both products on the first page. We show that it can be optimal for the intermediary to obfuscate a product—possibly the better one—since this weakens price competition and allows the sellers to extract a greater surplus from buyers; however, it is not socially optimal. The choice of which one to obfuscate depends on the distribution of search costs.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Springer Verlag
ISSN:	0889-938X
Date of First Compliant Deposit:	3 August 2017
Date of Acceptance:	22 March 2017
Last Modified:	13 Nov 2024 17:45
URI:	https://orca.cardiff.ac.uk/id/eprint/103173

Citation Data

Cited 2 times in Scopus. View in Scopus. Powered By Scopus® Data

Actions (repository staff only)

Edit Item