Radostina Shopova

Research

Publications

"Private Labels in Marketplaces" (2023) in International Journal of Industrial Organization,  Awarded  Best Theoretical Paper 2023
Online Appendix
Regulators are concerned that by introducing their own private labels, dominant online marketplace operators distort competition in their own favor. This paper addresses this concern by studying how online marketplaces differ from classic retailers with a wholesale arrangement. In online marketplaces, individual sellers set their own consumer prices, while the marketplace operator collects fees from their sales. I show that when introducing a private label, the marketplace operator does not have an incentive to distort competition and foreclose the outside seller. On the contrary, when introducing a private label, there is an incentive to decrease the fee charged to the outside seller and to vertically differentiate its own product in order to protect the seller's channel. However, relative to the wholesale model of classic retailers, online marketplace operators offer a lower quality with higher consumer prices, leading to less improvement in consumer surplus and potentially less harm to the outside seller.
Media coverage: "Private Labels in Online Marketplaces" in ProMarket, Publication of the Stigler Center at the University of Chicago Booth School of Business, 20 September 2022

"Dynamic Pricing with Uncertain Capacities" (2023) in Management Science (with Daniel Garcia and Maarten Janssen)
Poster presentation, 10 minutes presentation (video), Online Appendix.
In markets, such as those for airline tickets and hotel accommodations, firms sell time-dated products and have private information about unsold capacities. We show that competition under private information may explain observed phenomena, such as increased price dispersion and higher expected prices towards the deadline. We also show that private information severely limits the market power of firms and that information exchange about capacity increases firms' profits. Finally, we inquire into the incentives to unilaterally disclose information or to engage in espionage about rival's capacity and show that they increase firms' profits compared to the private information setting.

Working papers

"The Limits of Media See-Saws: Ad-Funded Platform Mergers Can Harm Both Sides" (2023) with Shiva Shekhar
We study the welfare effects of a merger between ad-funded platforms facing elastic consumer demand. We show that advertising fees as well as quality investment levels by the platforms fall post-merger. Interestingly, despite the lower advertising fees, advertisers may be worse off when their value of interacting with consumers is high enough. The intuition for this result is that the decrease in quality investments post-merger reduces overall consumer participation. Thus, studying innovation incentives is important in these ad-funded markets as the well-known surplus see-saw result may not hold making both sides of the markets worse while the merged entity emerges as the sole winner.

Work in progress

"Vertical Integration in Platforms: Two-sided Monetization and Commitments"

"On variety effects and linear demand systems"