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• Article | Marketing Science | Forthcoming

  Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market

  Lingling Zhang and Doug J. Chung

  The prevalence of online platforms opens new doors to traditional businesses for customer reach and revenue growth. This research investigates platform choice in a setting where prices are determined by negotiations between platforms and businesses. We compile a unique and comprehensive dataset from the U.S. daily deal market, where merchants offer deals to generate revenues and attract new customers. We specify and estimate a two-stage supply-side model in which platforms and merchants bargain on the wholesale price of deals. Based on Nash bargaining solutions, our model generates insights into how bargaining and competition jointly determine the price and firm profits. Our results show that there is systematic variation in bargaining power between platforms and merchants with different characteristics. By working with a bigger platform, merchants enjoy a larger customer base, but they are subject to lower margins due to less bargaining power during negotiations. Our counterfactual results quantify the value of platforms for merchants and show that merchants with lower bargaining power benefit more by working with a smaller platform. Regarding the impact of price negotiations on platform competition, we estimate that roughly 11% of the deals on a smaller platform are attributable to the platform’s lower level of revenue sharing.

  Keywords: business-to-business marketing; platform competition; Two-Sided Markets; price bargaining; daily deals; structural model; Two-Sided Platforms; Competition; Price; Negotiation;

  Citation:

  Zhang, Lingling, and Doug J. Chung. "Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market." Marketing Science (forthcoming).  View Details

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• Case | HBS Case Collection | August 2019

  Essential Explorations at MUJI

  Tomomichi Amano, Das Narayandas, Naoko Jinjo and Akiko Kanno

  Citation:

  Amano, Tomomichi, Das Narayandas, Naoko Jinjo, and Akiko Kanno. "Essential Explorations at MUJI." Harvard Business School Case 520-024, August 2019.  View Details

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• Case | HBS Case Collection | July 2019

  LaCroix Sparkling Water

  Tomomichi Amano, Das Narayandas and Kerry Herman

  Launched in 1981 as an “all occasion” sparkling water brand, LaCroix Sparkling Water has had a number of ups and downs as a brand. After being purchased by National Beverage in 1996, the brand was re-positioned as a new, colorful, fun alternative to the other sparkling water players at the time. As time passed; however, the brand was faced with internal turmoil as well as shifting customer expectations. How did LaCroix react to change both within the company and within the industry?

  Keywords: Brands and Branding; Organizational Change and Adaptation; Industry Structures; Food and Beverage Industry;

  Citation:

  Amano, Tomomichi, Das Narayandas, and Kerry Herman. "LaCroix Sparkling Water." Harvard Business School Case 520-014, July 2019.  View Details

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