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The aim is to analyze how sellers compete for visibility through commissions in a recommendation system.

Strategic Pricing and Ranking in Recommendation Systems with Seller Competition

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The aim is to analyze how sellers compete for visibility through commissions in a recommendation system.
Formulated as a Stackelberg game with sellers as leaders and the platform as a follower
Considered two variants: Order and Pricing (OP) and Order at Set-Prices (OS)
Analyzed customer interactions using a cascade click model
The platform can optimize ranking and pricing to maximize revenue based on seller commissions
Seller's choice of commissions directly impacts their visibility in the ranked menu
Differing strategies in OP and OS yield varied competitive outcomes for sellers

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Demonstrates how seller competition affects ranking and pricing in recommendation systems, suggesting implications for market strategies.

Walunj et al. (2026) studied this question.

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