More from these Authors

• Working Paper | HBS Working Paper Series | 2013

  Marketplace or Reseller?

  Andrei Hagiu and Julian Wright

  An intermediary can choose between functioning as a marketplace, on which suppliers sell their products directly to buyers, or as a reseller, purchasing products from suppliers and selling them to buyers. In our model, this choice comes down to whether residual control rights over non-contractible decision variables are better held by suppliers (the marketplace mode) or by the intermediary (the reseller mode). We focus on a single non-contractible decision variable ― the level of demand-enhancing marketing activities. The reseller is better able to coordinate these activities across products, whereas the marketplace mode benefits from allowing independent suppliers to tailor their marketing activities to local information about buyer demand. In the benchmark setting, the marketplace mode is preferred if and only if the variance of local information exceeds the squared value of spillovers from marketing activities across products. We explore several generalizations, showing how the benchmark tradeoff is modified in different settings.

  Keywords: Intermediation; multi-sided platforms; control rights; marketing;

  Citation:

  Hagiu, Andrei, and Julian Wright. "Marketplace or Reseller?" Harvard Business School Working Paper, No. 13–092, May 2013.

  CiteView DetailsRead Now

  Related

• Case | HBS Case Collection | 2013

  SaferTaxi: Connecting Taxis and Passengers in South America

  Peter Coles and Benjamin Edelman

  SaferTaxi, a taxi booking service in South America must develop its mobilization strategy; that is, it must attract enough passengers and drivers to make its service worthwhile for all. Drivers hesitate to pay for SaferTaxi's smartphones and service unless these will deliver passenger bookings—and passengers have no reason to sign up unless drivers are available. Meanwhile, regulators question the permissibility of online taxi booking in light of regulatory requirements, and some existing taxi booking vendors feel threatened by SaferTaxi's efforts to enter the market. As SaferTaxi attempts to satisfy these diverse constituents, international competition looms. What should SaferTaxi's founders do next?

  Keywords: taxi booking; smartphone; Transportation Networks; Network Effects; Laws and Statutes; South America; Argentina; Brazil; Chile;

  Citation:

  Coles, Peter, and Benjamin Edelman. "SaferTaxi: Connecting Taxis and Passengers in South America." Harvard Business School Case 913-041, April 2013. (request a courtesy copy.)

  CiteView DetailsPurchase

  Related

• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  GREE, Inc.

  Andrei Hagiu and Masahiro Kotosaka

  In 2012, GREE was one of the world's most profitable mobile social gaming companies. Its success in Japan was due both to its in-house games and to the development platform that it offered to third-party game developers. Its biggest challenge was to replicate the success of this two-pronged strategy in international markets, where it had to contend not just with many other game developers (e.g. Zynga), but also with the mobile platform providers themselves (e.g. Apple's iOS and Google's Android).

  Keywords: Strategy; Technology; Japan;

  Citation:

  Hagiu, Andrei, and Masahiro Kotosaka. "GREE, Inc." Harvard Business School Case 713-447, April 2013. (Revised from original November 2012 version.)

  CiteView DetailsPurchase

  Related