Vertical integration in the e-commerce sector

This paper studies vertical integration of a retailer and an operator in the e-commerce sector. It shows first that the comparison between independent oligopoly and integrated monopoly involves a tradeoff between competition and double marginalization which will have the opposite effect. With linear demand we need at least 3 firms (upstream and downstream) for the independent oligopoly to yield larger surplus. With constant elasticity demand, on the other hand, this is always true. Second it considers a setting where the number of firms is endogenous and determined such that gross profits cover fixed costs. While the integration of a single retailer-delivery operator pair may initially be welfare improving, the resulting market structure may not be sustainable. Furthermore, there exist a range of fixed costs for which the integrated monopoly emerges (following a single integration) and is welfare inferior to the initial independent equilibrium even when the reduction in the number of fixed costs is taken into account. Within this setting it also shows that multiple integration is typically welfare superior (for a given total number of firms) to the integration of a single retailer-delivery operator. Third and last, it considers an extension wherein customers differ according to their location, urban or rural, involving di¤erent delivery costs. It shows that urban integration is more likely to have an adverse effect on welfare than full integration

Pricing of delivery services and the emergence of marketplace platforms

This paper studies the pricing of delivery services and its impact on the market structure in the-commerce sector. We focus on one of the ongoing trends, namely the development of marketplaces. A retailer may not just sell its own products; but also provide a marketplace for other sellers, offering a variety of services including delivery. Marketplaces create a "secondary" market which undermines the delivery operator's abilityto differentiate prices. We study the subgame perfect equilibrium of a sequential game with two operators where retailer 0 may potentially develop a marketplace. The delivery operator and retailer 0 bargain over the delivery rate. Then, retailer 0 chooses the per-unit rate and the fixed fee at which it is willing to sell its delivery service to the other retailer. Finally, retailer 1 chooses its delivery option: either it directly patronizes the independent delivery operator, or it uses the services offered by the marketplace, and the corresponding subgame is played. Analytical results are completed by numerical simulations and lead to three main lessons. First the equilibrium nearly always implies a discount to the "leading" retailer, even when the profit maximizing operator has all the bargaining power. Second, the delivery operator cannot avoid the emergence of a marketplace even though this decreases its profits. Third, the market power of the delivery operator cannot be assessed solely by considering its market share

Pricing of delivery services and the emergence of marketplace platforms

This paper studies the pricing of delivery services and its impact on the market structure in the-commerce sector. We focus on one of the ongoing trends, namely the development of marketplaces. A retailer may not just sell its own products; but also provide a marketplace for other sellers, offering a variety of services including delivery. Marketplaces create a "secondary" market which undermines the delivery operator's abilityto differentiate prices. We study the subgame perfect equilibrium of a sequential game with two operators where retailer 0 may potentially develop a marketplace. The delivery operator and retailer 0 bargain over the delivery rate. Then, retailer 0 chooses the per-unit rate and the fixed fee at which it is willing to sell its delivery service to the other retailer. Finally, retailer 1 chooses its delivery option: either it directly patronizes the independent delivery operator, or it uses the services offered by the marketplace, and the corresponding subgame is played. Analytical results are completed by numerical simulations and lead to three main lessons. First the equilibrium nearly always implies a discount to the "leading" retailer, even when the profit maximizing operator has all the bargaining power. Second, the delivery operator cannot avoid the emergence of a marketplace even though this decreases its profits. Third, the market power of the delivery operator cannot be assessed solely by considering its market share

Vertical integration in the e-commerce sector

This paper studies vertical integration of a retailer and an operator in the e-commerce sector. It shows first that the comparison between independent oligopoly and integrated monopoly involves a tradeoff between competition and double marginalization which will have the opposite effect. With linear demand we need at least 3 firms (upstream and downstream) for the independent oligopoly to yield larger surplus. With constant elasticity demand, on the other hand, this is always true. Second it considers a setting where the number of firms is endogenous and determined such that gross profits cover fixed costs. While the integration of a single retailer-delivery operator pair may initially be welfare improving, the resulting market structure may not be sustainable. Furthermore, there exist a range of fixed costs for which the integrated monopoly emerges (following a single integration) and is welfare inferior to the initial independent equilibrium even when the reduction in the number of fixed costs is taken into account. Within this setting it also shows that multiple integration is typically welfare superior (for a given total number of firms) to the integration of a single retailer-delivery operator. Third and last, it considers an extension wherein customers differ according to their location, urban or rural, involving di¤erent delivery costs. It shows that urban integration is more likely to have an adverse effect on welfare than full integration

Platform competition: market structure and pricing

We consider an e-commerce sector with two retailers (which may be marketplaces) and two delivery operators. Products are differentiated according to the retailer and the mode of delivery. The representation of product differentiation is inspired by the Anderson, De Palma and Thisse (2002) discrete choice model. We examine vertical integration of a retailer/ delivery operator pair. Vertical restraints like bundling and/or foreclosure are then considered on top of the integration. Vertical integration in itself eliminates double marginalization, which enhances consumerswelfare. On the other hand, it reduces product variety, and the market power it conveys is likely to reduce profits of the remaining firms. Bundling or foreclosure can be expected to further exacerbate these negative effects. Our most remarkable result is that vertical integration of a single retailer/operator pair will lead to bundling and foreclosure, and possibly the complete exit of the remaining retailers and operators. This is true even when no explicit bundling or foreclosure is put in place on an a priori basis. Consequently, a competition authority that is concerned with total welfare, should not allow the initial merger

Validation of a purely elastic model and a finite element model for a screw press

The increasing use of superalloys in the industry brings new issues to forging manufacturers concerning Finite Element analysis of the forming process. Once we consider high performing materials, significant differences can occur between numerical and experimental results. The lack of knowledge about materials and thermal exchanges explains a part of these differences but it has been shown that the machine behavior has a significant impact on the forging process. Press modelling is a way to quantify the energy dissipated in the machine structure and improve simulations. This study is a first step in the screw press modelling. Starting from an approximation of the press geometries, a purely static elastic (PSE) model is developed and a numerical simulation considering only uprights is performed. Uprights stiffness predictions from the PSE model and the FE simulation are compared and the PSE model is validated. Then, the press is approximated by a portal frame and FE simulation is realized to determined uprights stiffness by considering links effects and bending behaviors in the structure. Comparison with experimental results validates the approximation.région Grand Est Manoir Industrie Bouzonvill

Production and characterization of two medium-chain-length polydroxyalkanoates by engineered strains of Yarrowia lipolytica

Background: The oleaginous yeast Yarrowia lipolytica is an organism of choice for the tailored production of various compounds such as biofuels or biopolymers. When properly engineered, it is capable of producing medium-chain-length polyhydroxyalkanoate (mcl-PHA), a biobased and biodegradable polymer that can be used as bioplastics or biopolymers for environmental and biomedical applications.Results: This study describes the bioproduction and the main properties of two different mcl-PHA polymers. We generated by metabolic engineering, strains of Y. lipolytica capable of accumulating more than 25% (g/g) of mcl-PHA polymers. Depending of the strain genetic background and the culture conditions, we produced (i) a mcl-PHA homopolymer of 3-hydroxydodecanoic acids, with a mass-average molar mass (M-w) of 316,000 g/mol, showing soft thermoplastic properties with potential applications in packaging and (ii) a mcl-PHA copolymer made of 3-hydroxyoctanoic (3HO), decanoic (3HD), dodecanoic (3HDD) and tetradecanoic (3TD) acids with a M-w of 128,000 g/mol, behaving like a thermoplastic elastomer with potential applications in biomedical material.Conclusion: The ability to engineer Y. lipolytica to produce tailored PHAs together with the range of possible applications regarding their biophysical and mechanical properties opens new perspectives in the field of PHA bioproduction

E-commerce, parcel delivery and environmental policy

We study the design of environmental policy in the e-commerce sector and examine two main questions. First, what is the appropriate level of intervention along the value chain. Second, which instruments should be used at a specic level in the vertical chain? We consider a model with two retailers/producers who sell a di¤erentiated product and two parcel delivery operators. The production, retailing and delivery of these goods generates CO2 emissions. We assume that it is more expensive for the retailers and the delivery operators to use greentechnologies. We consider di¤erent scenarios reecting the type of competition and the vertical structure of the industry. In all cases the equilibria are ine¢ cient for two reasons. First, at both level of the value chain (at the production/retailing stage and the delivery stage), the levels of emissions are too large (given the output levels - the number of items produced and delivered). Second the levels of outputs are not e¢ cient because the cost of emissions is not reected by the consumer prices. We show that in the perfect competition scenario a uniform Pigouvian tax on emission, reecting the marginal social damage, is su¢ cient to correct both types of ine¢ ciencies. Under imperfect competition a Pigouvian emissions tax is also necessary, but it has to be supplemented by positive or negative taxes on the quantity of good produced and delivered. The specic design of these instruments is a¤ected by vertical integration between a retailer and a delivery operator

Data and the regulation of e-commerce: data sharing vs. dismantling

This paper considers an e-commerce market wherein a vertically integrated marketplace competes downstream with a single retailer and upstream with an independent parcel delivery operator. Because of the information collected by the marketplace on customers' habits and preferences, the integrated parcel delivery operator has lower delivery costs than its competitor. Products are differentiated according to the retailer and the parcel operator who delivers them. The representation of product di§erentiation is inspired by the Anderson, De Palma and Thisse (2002) discrete choice model. We study several scenarios each representing a speciÖc policy implemented to regulate the marketplace. The Örst one is a data sharing policy. The integrated marketplace has to share its information with the other delivery operator which in turn will lower this operatorís cost of delivering the marketplaceís product. The second one is vertical separation under which the parcel delivery operator previously owned and managed by the marketplace becomes independent. Finally we consider a full dismantlement scenario under which there is both vertical and horizontal separation. We show that the optimal policy is either complete dismantlement or data sharing. The relative impacts on consumer surplus and total welfare of these two options involve a tradeo§ between the increased competition implied by complete dismantling and the data related delivery cost advantage achieved under data sharing. When this cost advantage is small, completely dismantling dominates, while data sharing is the best policy when the cost advantage is large