# Marketplace Operators Can Induce Competitive Pricing

arXiv: https://arxiv.org/abs/2503.06582 · HTML: https://mlsanity.com/paper/2503.06582/

## Key facts

- Cited by 1 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 9 Mar 2025.

## Built on by (most cited first, 1 of 1)

- [Price of Anarchy of First-Price Auctions in Agentic Markets](https://mlsanity.com/paper/2610.20587/) (2026)

## Abstract (arXiv)

As e-commerce marketplaces continue to grow in popularity, it has become increasingly important to understand the role and impact of marketplace operators on competition and social welfare. We model a marketplace operator as an entity that not only facilitates third-party sales but can also choose to directly participate in the market as a competing seller. We formalize this market structure as a price-quantity Stackelberg duopoly in which the leader is a marketplace operator and the follower is an independent seller who shares a fraction of their revenue with the marketplace operator for the privilege of selling on the platform. The objective of the marketplace operator is to maximize a weighted sum of profit and a term capturing positive customer experience, whereas the independent seller seeks solely to maximize their own profit. We derive the subgame-perfect Nash equilibrium and find that it is often optimal for the marketplace operator to induce competition by offering the product at a low price to incentivize the independent seller to match their price.