This paper investigates the implications of vertical integration with private labels in the marketplace model opposed to the classic wholesale model. Differently from classic retailers, on a marketplace firms set end-consumer prices and the intermediary collects fees. When introducing a...

Search frictions can explain why the "law of one price" fails in retail markets and why even firms selling commodity products have pricing power. In online commerce, physical search costs are low, yet price dispersion is common. We use browsing data from eBay to estimate a model of consumer...