This paper considers the monetization of online marketplaces. These platforms trade-off fees from advertising with commissions from product sales. While featuring advertised products can make search less efficient (lowering transaction commissions), it incentivizes sellers to compete for better...

Why do consumers value shopping online? We decompose the value of e-commerce to individual consumers and highlight the role of convenience, i.e., the avoidance of transportation costs. We complement household purchase panel data with precise locations of consumers and stores, and show that...