Platform Liability and Innovation

Doh-Shin Jeon, Yassine Lefouili and Leonardo Madio ()
Additional contact information
Leonardo Madio: University of Padova, Department of Economics and Management, Via del Santo, 33, 35139 Padova, Italy

No 21-05, Working Papers from NET Institute

Abstract: We study an e-commerce platform's incentives to delist IP-infringing products and the effects of introducing a liability regime that induces the platform to increase its screening intensity. We identify conditions under which platform liability is socially desirable (respectively, undesirable) by analyzing its intended and unintended effects on the innovation incentives of brand owners. We show that making the platform liable for the presence of IP-infringing products can lead to a reduction (instead of an increase) in brand owners' innovation if the platform responds to more screening by raising its commission rate. We then consider various extensions that allow us to identify additional forces that strengthen (respectively, weaken) the social desirability of liability. We conclude by presenting some implications for policymakers.

Keywords: Platforms; Platform Liability; Intellectual Property; Innovation; Delisting (search for similar items in EconPapers)
JEL-codes: L13 L43 L96 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2021-09
New Economics Papers: this item is included in nep-ind, nep-ino, nep-ipr, nep-law, nep-mic, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Platform Liability and Innovation (2024)
Working Paper: Platform Liability and Innovation (2022)
Working Paper: Platform Liability and Innovation (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:2105

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