Please use this identifier to cite or link to this item:
http://hdl.handle.net/2445/210461
Title: | Platform Liability with Reputational Sanctions |
Author: | De Chiara, Alessandro Ganuza, Juan José Gómez, Fernando Manna, Ester Segura-Moreiras, Adrian |
Keywords: | Empreses de plataformes digitals Comerç electrònic Responsabilitat contractual Multi-sided platform businesses Electronic commerce Breach of contract |
Issue Date: | 2024 |
Series/Report no: | [WP E-Eco24/467] |
Abstract: | This paper presents a framework where sellers, an online platform with monopoly power, and consumers transact. We study the interaction between the imposition of liability on the platform, the reputational sanctions exerted by consumers, and the internal measures adopted by the platform to keep in check the sellers, whenever a product generates losses to consumers. We show that introducing direct legal liability of the platform (i) may have both positive and negative effects for safety investments and (ii) is generally welfare-increasing albeit it may be detrimental for welfare when legal costs are sizable. Additionally, when sellers are heterogeneous with respect to either their sensitivity to consumers' or platform' sanctions, we find that platform legal liability will affect the selection of participating sellers, although the sign and size of the effect largely depend on parameter values. |
It is part of: | UB Economics – Working Papers, 2024, E24/467 |
URI: | http://hdl.handle.net/2445/210461 |
Appears in Collections: | UB Economics – Working Papers [ERE] |
Files in This Item:
File | Description | Size | Format | |
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E24-467_Manna et al..pdf | 522.61 kB | Adobe PDF | View/Open |
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