Price Competition Under Information (Dis) Advantage

06/07/2023 - 06/07/2023

Price Competition Under Information (Dis) Advantage

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Speaker:   Hsin-Tien Tiffany Tsai, Assistant Professor, Department of Economics, National University of Singapore

Abstract: We examine the impact of data access within a vertically integrated e-commerce platform. Using a unique daily panel, we find that both the platform owner and third-party sellers base pricing on past sales, but only the owner exploit competitors' sales data. We estimate a price competition model with heterogeneous seller learning. We find that (1) eliminating the owner's access to competitors' data increases social welfare by 0.33%, negatively impacting the owner through reduced first-party sales and (2) providing third-party sellers with equal access to competitors' data as the owner increases social welfare by 1.65%, benefiting the owner through increased referral fees and yielding a Pareto improvement. Bio: Hsin-Tien Tiffany Tsai is an Assistant Professor at the Department of Economics at the National University of Singapore. Previously, she obtained a Ph.D. in Economics from UC Berkeley in 2019. She is an IO economist focusing on the digital economy, with projects often overlapping with vertical market structure, pricing, and new technologies.