Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297426 
Year of Publication: 
2023
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2023-41
Publisher: 
Bank of Canada, Ottawa
Abstract: 
In this paper, we empirically study how flagship entry in an online marketplace affects consumers, the platform, and various sellers on the platform. We find flagship entry may benefit consumers by expanding the choice set, by intensifying price competition within the entry brand, and by improving consumer perception for parts of the platform. In the meantime, flagship entry cannibalizes the sales of same-brand sellers, while other brands may gain as the buyer base expands on the platform. Counterfactual simulation suggests that flagship entry improves the gross merchandise value of the platform and overall consumer welfare in most cases.
Subjects: 
Market structure and pricing
Economic models
JEL: 
D4
L1
L8
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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