Information sharing when competing manufacturers adopt asymmetric channel in an e-tailer

<p style='text-indent:20px;'>This paper investigates the incentive for information sharing when competing manufacturers sell substitute products through the marketplace channel and the reseller channel respectively. Our analysis shows that the e-tailer's incentive to share information strongly depends on the platform fee, competition intensity, and different information sharing scenarios. If competition intensity is small, or competition intensity is large and the platform fee is enough large, the e-tailer has incentive to alone share information with the manufacturer who is from the marketplace channel; if competition intensity is moderate and the platform fee is small, or competition intensity is large but the platform fee is moderate, it has incentive to share information with both manufacturers; if competition intensity is large but the platform fee is small, it has no incentive to share information. The results also indicate that the double marginalization effect of information sharing is a promoting factor to share information under linear cost, which is different from previous literature. Additionally, we find that the main qualitative insights from the base model are robust even if one monopolist manufacturer employs both channels. And we also compare the incentive of information sharing under asymmetric channel with that under symmetric channel.</p>

Market power in bilateral oligopoly markets with non-expandable infrastructures

We develop a novel model of price-fee competition in bilateral oligopoly markets with non-expandable infrastructures and costly transportation. The model captures a variety of real market situations and it is the continuous quantity version of the assignment game with indivisible goods on a fixed network. We define and characterize stable market outcomes. Buyers exclusively trade with the supplier with whom they achieve maximal bilateral joint welfare at prices equal to marginal costs. Maximal fees and the suppliers’ market power are restricted by the buyers’ credible threats to switch suppliers. Maximal fees also arise from a negotiation model that extends price competition to price-fee competition. Competition in both prices and fees necessarily emerges. It improves welfare compared to price competition, but buyers will not be better off. The minimal infrastructure achieving maximal aggregate welfare differs from the minimal network that protects buyers most.