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Analyzing Fee Structure of Online Marketplaces Based on Competition among Sellers and Competition among Buyers  

Jung, Young-Jo (한국과학기술원 테크노경영대학원)
Jang, Dae-Chul (한국과학기술원 테크노경영대학원)
Ann, Byong-Hun (한국과학기술원 테크노경영대학원)
Publication Information
Journal of the Korean Operations Research and Management Science Society / v.34, no.1, 2009 , pp. 85-100 More about this Journal
Abstract
An online marketplace, such as eBay, is an example of two-sided markets. In online marketplaces, there are transactions between sellers and buyers and direct competition effects among sellers and among buyers. Previous research on two-sided market has not handle these competition effects and mostly focused on indirect network externalities between sellers and buyers. We analyze the fee structure of an online marketplace considering direct competition effects among sellers and among buyers. We find that when fees for sellers and buyers can be imposed, an auction or fixed-pricing rule can be chosen according to the characteristics of a product traded. But when only fees for sellers can be imposed, an auction can be taken as a trading mechanism solely.
Keywords
Two-sided Market; Competition Effect; E-marketplace; Auction; Fixed-price;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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