Abstract
In several industries, merchants have the choice to offer add-on services to consumers either themselves or through a platform. In this paper, we analyze whether a platform has an incentive to impose exclusive contracts to merchants when the latter can bundle an add-on service to a primary product and compete with the platform. We show that the platform never imposes exclusive contracts when the maximum value that consumers assign to the primary product is high. When the maximum value of the primary product decreases, the platform trades off between increasing consumer demand by offering exclusive contracts and increasing merchants' acceptance of its service by offering non exclusive contracts.
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