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Data and the regulation of e-commerce: data sharing vs. dismantling

Borsenberger, Claire, Cremer, Helmuth, Joram, Denis, Lozachmeur, Jean-Marie and Malavolti, Estelle (2020) Data and the regulation of e-commerce: data sharing vs. dismantling. TSE Working Paper, n. 20-1094, Toulouse

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Abstract

This paper considers an e-commerce market wherein a vertically integrated marketplace competes downstream with a single retailer and upstream with an independent
parcel delivery operator. Because of the information collected by the marketplace on
customers' habits and preferences, the integrated parcel delivery operator has lower delivery costs than its competitor. Products are differentiated according to the retailer and
the parcel operator who delivers them. The representation of product di§erentiation is
inspired by the Anderson, De Palma and Thisse (2002) discrete choice model.
We study several scenarios each representing a speciÖc policy implemented to regulate the marketplace. The Örst one is a data sharing policy. The integrated marketplace
has to share its information with the other delivery operator which in turn will lower
this operatorís cost of delivering the marketplaceís product. The second one is vertical separation under which the parcel delivery operator previously owned and managed
by the marketplace becomes independent. Finally we consider a full dismantlement
scenario under which there is both vertical and horizontal separation.
We show that the optimal policy is either complete dismantlement or data sharing. The relative impacts on consumer surplus and total welfare of these two options
involve a tradeo§ between the increased competition implied by complete dismantling
and the data related delivery cost advantage achieved under data sharing. When this
cost advantage is small, completely dismantling dominates, while data sharing is the
best policy when the cost advantage is large.

Item Type: Monograph (Working Paper)
Language: English
Date: May 2020
Place of Publication: Toulouse
Uncontrolled Keywords: E-commerce, delivery operators, vertical integration, platform regulation, data sharing, dismantling
JEL Classification: L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
L81 - Retail and Wholesale Trade; Warehousing; e-Commerce
L87 - Postal and Delivery Services
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 27 Apr 2020 08:46
Last Modified: 29 Jul 2020 12:41
OAI Identifier: oai:tse-fr.eu:124217
URI: http://publications.ut-capitole.fr/id/eprint/34733

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