Self-preferencing, Quality Provision, and Welfare in Mobile Application Markets

Platforms often display their products ahead of third-party products in search. Is this due to consumers preferring platform-owned products or platforms engaging in self-preferencing by biasing search towards their own products? What are the welfare implications? I develop a structural model of mobile application markets to identify self-preferencing and quantify its welfare effects, taking into account third-party developers' quality adjustment. A new dataset on app downloads, prices, characteristics, and search rankings is used to estimate the model. Estimates indicate self-preferencing. Simulations show higher consumer welfare and third-party profits without self-preferencing.

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Year of publication:	2023
Authors:	Teng, Xuan
Publisher:	München und Berlin : Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition
Subject:	competition policy \| platform design \| consumer search \| endogenous product choice

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Series:	Discussion Paper ; 434
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	188391972X [GVK] hdl:10419/282126 [Handle] RePEc:rco:dpaper:434 [RePEc]
Classification:	D12 - Consumer Economics: Empirical Analysis ; D83 - Search, Learning, Information and Knowledge ; L13 - Oligopoly and Other Imperfect Markets ; L86 - Information and Internet Services; Computer Software
Source:	EconStor

Persistent link: https://www.econbiz.de/10014467816