Title: On the Regulation of Dual-Role Platforms

Speaker: Yue Li, Assistant Research Fellow at Shandong University. She received her Ph.D. from the University of Wisconsin-Madison. Her paper has been published in the Journal of Marketing Research, and she is the PI of the Natural Science Foundation of Shandong Province and other projects.

Abstract: A platform's marketplace data can be utilized to improve product quality. The platform's role as an intermediary incentivizes the sharing of product-improvement information to support independent sellers, while its additional role as a seller creates a conflicting incentive to withhold valuable insights from competitors. This conflict of interest can result in self-preferencing, where the platform prioritizes using information to improve its own product, raising regulatory concerns. In this research, we build a game-theoretical model to study a dual-role platform's information sharing strategy and evaluate two regulatory measures designed to address self-preferencing. Our main findings are as follows: First, in a laissez-faire market, the platform engages in self-preferencing for high-value information while making low-value information accessible to all sellers. Second, prohibiting self-preferencing, as outlined in Article 6(2) of the Digital Markets Act (DMA), can (weakly) increase consumer surplus but may exacerbate market inefficiencies. Lastly, banning the platform from selling directly to consumers can encourage or discourage information sharing, leading to ambiguous impacts on consumer surplus and social welfare.

Date & time: 27 March 2025, 12:15 - 13:15

Venue: B321, Zhixin Building, Central Campus, Shandong University