We recently have witnessed two important trends in online retailing: the advent of new media (e.g., social media and search engines) makes advertising affordable for small sellers, and large online retailers (e.g., Amazon and JD.com) opening their platforms to allow even direct competitors to sell on their platforms. We examine how new-media advertising affects retail platform openness. We develop a game-theoretic model in which a leading retailer, who has both valuation and awareness advantages, and a third-party seller, who sells an identical product, engage in price competition. We find that the availability of relatively low-cost advertising through new media plays a critical role in influencing the leading retailer to open its platform and to form a partnership with the third-party seller, which would be impossible when the cost of advertising is relatively high. Low-cost advertising can increase consumer surplus either directly via the third-party seller’s advertising or indirectly via the partnership on the leading retailer’s platform. We also find that the leading retailer has a greater incentive to open its platform and that the partnership is more likely to be formed when there are network effects, when the leading retailer can control the third-party seller’s exposure on its platform, or when the leading retailer can offer a direct advertising service to the third-party seller. Meanwhile, the constraints on the third-party seller’s advertising budget can reduce the leading retailer’s incentive to open its platform, making the partnership less likely. Our analysis offers important insights into the underlying economic incentives that help explain the emerging open retail platform trend in the era of new-media advertising.

中文翻译：

---

新媒体广告与零售平台开放

我们最近见证了在线零售的两个重要趋势：新媒体（例如社交媒体和搜索引擎）的出现使小卖家能够负担得起广告，以及大型在线零售商（例如亚马逊和京东）开放其平台以允许甚至直接竞争对手在他们的平台上销售。我们研究了新媒体广告如何影响零售平台的开放性。我们开发了一个博弈论模型，其中具有估值和知名度优势的领先零售商和销售相同产品的第三方卖家进行价格竞争。我们发现，通过新媒体提供相对低成本的广告在影响领先零售商开放其平台并与第三方卖家建立合作伙伴关系方面发挥着关键作用，当广告成本相对较高时，这是不可能的。低成本广告可以直接通过第三方卖家的广告或通过与领先零售商平台的合作间接增加消费者剩余。我们还发现，领先零售商开放其平台的动机更大，并且当存在网络效应时，当领先零售商可以控制第三方卖家在其平台上的曝光时，或者当领先的零售商可以向第三方卖家提供直接广告服务。同时，第三方卖家广告预算的限制会降低领先零售商开放平台的积极性，降低合作的可能性。