We develop a Hotelling duopoly model of competition on a gatekeeper platform in which firms choose between uniform pricing and personalized pricing. Implementing personalized pricing requires access to a platform-provided pricing technology and entails a per-transaction fee set by the platform. The platform also designs rankings and recommendations that affect the distribution of consumers between loyal and marginal types. We show that the platform may strategically reshape the demand environment to make personalized pricing more attractive to firms and thereby raise the fee it can charge. By reallocating mass from loyal to marginal and more disloyal consumers, the platform intensifies competition under uniform pricing and relaxes firms’ adoption constraint. Excessive centralization, however, erodes the rents that sustain fee extraction, so the platform chooses an interior degree of demand centralization. Relative to a no-manipulation benchmark, this reallocates surplus toward the gatekeeper and away from firms and consumers. When the platform also appropriates a share of seller profits, its incentives may reverse: it may favor loyalty-enhancing designs that soften downstream competition. The analysis highlights how platform monetization and recommendation design jointly determine downstream competition and its welfare consequences.

In an uncertain demand environment, the per-unit price of a two-part tariff can have insurance properties, insofar as it transfers risk from risk-averse downstream firms to less risk averse upstream firms, and compensation properties insofar as it compensates downstream firms for lessened attractiveness of trade. Both properties have opposite effects such as the first one can increase double marginalization and the second one can mitigate it. This paper provides experimental evidence of both properties.

We investigate to what extent crop insurance can address the multiple risks faced by agricultural producers. Climatic, disease, technological and financial risks make insurance especially valuable to farmers. But their interactions and regulatory constraints also make insurance especially difficult to design. We stress that some risks (such as heavy rainfalls) can affect the feasibility of prevention and curative actions for other risks (such as crop diseases), so that risks, beyond correlation, compound in a complex way. We contrast insurance in the US and in the EU, where different types of risks are covered. We illustrate some of the interactions between multiple risks, regulatory constraints on insurance and farmers' actions with the case of wine-growing in the South-West of France.

We study a vertically integrated producer (VIP) that supplies a downstream firm under price competition. The VIP may decentralize the final price decision to its downstream unit; the latter thereby ignores the effect of the output price on upstream sales. We find that decentralization benefits the VIP — irrespective of whether the products are substitutes or complements. Decentralization also benefits the consumers when products are substitutes, but it harms them when the products are complements. Interestingly, when products are substitutes, decentralization decreases both output prices despite restoring a double margin on the downstream unit's sales.

When a firm appoints a new manager, it reopens the possibility of new contractual friction with its partners. We explore strategic ambiguity as a potential for friction with a supplier. The firm's new manager probably has fuzzy expectations about the supplier's strategy. An optimistic manager weights favorable strategies more heavily than detrimental ones, whereas a pessimistic manager does the opposite. We show that the manager's degree of optimism is critical: above a threshold, it can cause the supplier to change the timing of its contracting and increase its profits. We also find that this threshold degree of optimism depends on the degree of product substitution.

The theoretical literature on vertical relationships usually assumes that beliefs about secret contracts take specific forms. In a recent paper, Eguia et al. (2018) propose a new selection criterion that does not impose any restriction on beliefs. In this article, we extend their criterion by generalizing it to risk-averse retailers, and we show that risk aversion modifies the size of the belief subsets that support each equilibrium. We conduct an experiment which revisits that of Eguia et al. (2018). Experimental results confirm the treatment effect: the more sensitivity there is towards risk, the more the equilibrium played is consistent with passive beliefs.