On platforms with peer-to-peer reviews, new products encounter the so-called “cold- start” problem. Little-known products are bought too rarely and remain little known. This paper studies how policies aimed at mitigating the cold-start problem, specifically by low- ering prices for new products, affect welfare and how much of the welfare effect is due to a change in the speed of social learning. Based on data from Airbnbs located in Manhattan, we estimate a structural model with short-lived consumers and long-lived hosts who make dynamic entry, exit, and pricing decisions. We then simulate a counterfactual reduction in Airbnb’s revenue fee for new listings. While this increases total welfare, we find that it does not accelerate social learning. By contrast, if the cost of the fee reduction is passed on to hosts, faster social learning in itself increases consumer welfare by up to 5% and is the main driver of the total welfare gain.
This paper examines the effects of over 1,000 acquisitions by major technology firms on innovation. Using detailed patent and workforce data linked to technology acquisitions and a suite of event-study and difference-in differences designs, we …
We examine product recommendations in Amazon’s “Similar items to consider” box in the US and Canada, finding evidence of self- preferencing in Canada. In our dataset, alternatives to Amazon Basics (AB) products are sometimes recommended in the US but never in Canada, while non-AB products are sometimes recommended in Canada but never in the US. By comparing sales across domains, we find that non-AB products not recommended in Canada due to self-preferencing experience a 22% sales decrease compared to those that are not exposed to self-preferencing in the same way.
This paper studies bid rigging in auctions with bidder preselection. We develop a theoretical model to analyze the optimal behavior of a partial bid-rigging cartel and show how commonly used two-stage auction formats, in which the first stage is used …
We want to find out whether the concern of seller and consumer harm as a result of Amazon entry finds emprical support beyond anecdotal evidence provided by the media. To this end, we measure the predictors and effects of Amazon first-party retail entry on consumer and third-party merchant outcomes in the Home & Kitchen department of Germany’s Marketplace between 2016 and 2021. While the empirical setting presented challenges for estimating causal effects, our results are broadly inconsistent with systematic adverse effects of Amazon entry on Amazon Marketplace.