Research
Research
Abstract: Platforms like Booking.com have adopted price-matching guarantees (PMGs) following the ban of price parity clauses (PPCs) in various jurisdictions. These PMGs commit the platform to matching prices offered off-platform. I identify a puzzle unique to platform PMGs that does not arise when sellers offer PMGs themselves: sellers might set impossibly high prices on the platform while competing with low prices on their direct sales channels (e.g., their own websites), exploiting the PMG.
The puzzle is solved if the platform discriminates against high-priced offers in its search rankings. Then the PMG prevents sellers from showrooming on the platform’s search services, thereby enhancing the platform’s profitability. Relative to PPCs, PMGs yield less profit to the platform and have a smaller effect on raising consumer prices.
Abstract: We add to the puzzle observed by Schwartz and Vincent (2020) that under the possibility to offer cash-rebates to buyers, the combination of platform competition and price parity clauses leads to inexistence of an equilibrium in which more than one platform operates. We show that the inexistence result holds under an even more general set of models, including for when we allow for seller competition on the platform as well as sellers competing with the platform by offering a direct sales channel.
Abstract: I consider an agency problem with productive information acquisition about a budget-constrained agent’s cost of different actions at an interim stage: after contracting but before the agent’s unobservable action choice. Depending on the actions’ costs, the principal would, even if action and information were publicly observable, want to incentivize one action or the other. I look at different scenarios where either the principal (centralization) or the agent (delegation) acquires the information, and whether this information is revealed publicly or privately.
I show that the principal always wants to delegate information acquisition if the information revelation scheme (public or private) is the same for both principal and agent. Only if information revelation is superior under centralization, is there a trade-off such that the principal strictly prefers centralization when information acquisition is cheap.
Abstract: In a model in which the principal privately learns information directly affecting only the agent’s utility (e.g., the agent’s effort cost) after a contract is agreed upon, I show that the agent’s limited liability obstructs effective communication. This prevents the principal from improving her situation compared to having no information. Conversely, without the limited liability constraint, the principal can achieve the first-best outcome, even though effective communication limits her to earn the same profit regardless of the private information she acquires.
The findings suggest that policy interventions prohibiting contracts from including punishments in the form of transfers from the agent to the principal may reduce total welfare, disadvantaging the principal without benefiting the agent.
"Can Land Taxes Foster Sustainable Development? An Assessment of Fiscal, Distributional and Implementation Issues," Land Use Policy, Vol. 78, November 2018, pp. 338-352, with M. Kalkuhl, B. Fernandez Milan, G. Schwerhoff, M. Jakob, and F. Creutzig