Platform Pricing Structure and Moral Hazard

Roger, Guillaume; Vasconcelos, Luís

doi:10.1111/jems.12059

Cited by 25 publications

(12 citation statements)

References 15 publications

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“…In the same line, an insurance system can be designed to prevent agency problems (e.g. moral hazard) when the content of the transaction can be strategically altered (Roger and Vasconcelos 2014 ; Weber 2014 ). However, these mechanisms expect the motivations to be purely monetary, i.e., the participants only fear a loss of profit.…”

Section: Literature Reviewmentioning

confidence: 99%

Banned from the sharing economy: an agent-based model of a peer-to-peer marketplace for consumer goods and services

Querbes

2017

J Evol Econ

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The emergence of profit-based online platforms related to the Sharing Economy, such as BlaBlaCar and Airbnb, provides new means for end users to create an income from their possessions. With this opportunity, participants have to make strategic economic decisions despite limited formal expertise and information. Decentralization (using digital technologies) and reputation (using user reviews) are the core mechanisms chosen by these platforms to mitigate these limitations and to work efficiently as online matchmakers. We test the performance of these two mechanisms by studying the allocative efficiency (in terms of value and volume of transactions) of simulated marketplaces under different types of motivation from the participants and control from the platforms. As a result, we find an inverted-U relationship between the decision-making leeway available to the participants and the platform’s allocative efficiency. From the participants’ perspectives, too much freedom or too many barriers lead to market failures affecting specific participants: low-end consumers are banned from the marketplace while high-end providers experience lower levels of activity. As governance advice for these platforms, we show the limitations of promoting these platforms on the sole motive of monetary rewards.

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Section: Literature Reviewmentioning

confidence: 99%

Banned from the sharing economy: an agent-based model of a peer-to-peer marketplace for consumer goods and services

Querbes

2017

J Evol Econ

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“…Roger and Vasconcelos [36] examined platform pricing and moral hazard in a dynamic setting with reputation, wherein sellers can be induced by a two-part tariff, including a fixed registration fee and a variable transaction fee, to take a favorable high-effort action. In that setting, elimination of the moral hazard problem depends on the availability of the fixed participation fee, which allows sellers to effectively place a bond.…”

mentioning

confidence: 99%

Intermediation in a Sharing Economy: Insurance, Moral Hazard, and Rent Extraction

Weber

2014

Journal of Management Information Systems

210

126

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“…The third related research is the growing literature on mechanism design in the information system. Researchers in information systems not only design and evaluate new systems in a business context [33], but also focus on how to price the services of the mechanisms [13,[34][35][36][37][38][39][40][41]. For instance, Amit Basu et al examine the online and authentication services for matching-seekers, and study how the matching platform should price its search and authentication services [13].…”

Section: Literature Reviewmentioning

confidence: 99%

“…Guowei Dou et al consider that the investment for one side would affect the utility of users on two sides, thus affecting the demand and profit of the platform, and then they investigate one-side value-added services investment and pricing strategies for a two-sided platform [36]. Guillaume Roger and Luis Vasconcelos introduce a pricing mechanism, whereby a two-sided platform charges transaction and registration fees to overcome the moral hazard on the sellers' side [37]. Ricardo Flores-Fillol et al propose a model to study the optimal price strategy of an airport platform that can generate revenues both from traditional aeronautical and non-aviation activities [41].…”

Section: Literature Reviewmentioning

confidence: 99%

Online Reviews Matter: How Can Platforms Benefit from Online Reviews?

Dong

et al. 2019

Sustainability

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Online reviews mitigate uncertainty about product quality that is caused by information asymmetry. However, low-quality online reviews are not effective, while high-quality online reviews may raise costs. Unlike the previous studies, this paper develops a game-theoretic model to examine the feasibility and pricing of online review supervision mechanism for operators of platforms that are based on the ‘network externality’. The results reveal that platforms are not always benefited from online reviews. We provide a new perspective and give some preventive suggestions for platforms with a view to furthering sustainable development.

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Platform Pricing Structure and Moral Hazard

Cited by 25 publications

References 15 publications

Banned from the sharing economy: an agent-based model of a peer-to-peer marketplace for consumer goods and services

Banned from the sharing economy: an agent-based model of a peer-to-peer marketplace for consumer goods and services

Intermediation in a Sharing Economy: Insurance, Moral Hazard, and Rent Extraction

Online Reviews Matter: How Can Platforms Benefit from Online Reviews?

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