Shota Ichihashi

Title: "Automated Pricing on a Platform".

Abstract: I study a model of automated pricing on a platform. Sellers offer identical products, and consumers have a known valuation for the product. All sellers---regardless of whether they join the platform---post prices outside the platform, which are observable to consumers but not to the platform. Nonetheless, the platform can adopt an automated pricing algorithm, which sets prices on behalf of sellers on the platform, to attract sellers, stifle off-platform competition, and earn a positive profit. The result highlights how an algorithm enables a platform to create and monetize strategic uncertainty.