Working Papers

Online Marketplace Advertising

Hana Choi and Carl F. Mela

May 14, 2018

This study examines the trade-off between advertising revenue and transaction revenue for online marketplaces. While charging a fee for sales encourages “web-rooming,” results suggest that lowering the cost-per-action (fees) and increasing the cost-per-consideration (clicks) yields a “win-win” outcome for the platform and its advertisers.

By using MSI.org you agree to our use of cookies as identifiers and for other features of the site as described in our Privacy Policy.