Platform Disintermediation with Repeated Transactions

We consider a setting in which a platform matches buyers and sellers, who then wish to transact with each other multiple times. The platform charges fees for hosting transactions but also offers convenience benefits. We consider two scenarios. In one scenario, all transactions must occur on the platform; in the other scenario, buyers and sellers can disintermediate the platform after the first transaction and do subsequent transactions offline. We find that the platform reacts to disintermediation by using a “front-loaded” pricing scheme, whereby it charges more for earlier transactions. We also show that sometimes the platform is better off when disintermediation is possible—because it can use disintermediation to screen users’ private information about their convenience benefits. Buyers are not necessarily better off when they can disintermediate due to the way in which the platform adjusts its fees. This paper was accepted by Greg Shaffer, marketing. Funding: A. Rhodes acknowledges funding from the French National Research Agency under the Investissements d’Avenir Program [Grant ANR-17-EURE-0010] and the European Union [Grant 101088307]. Views and opinions expressed are those of the author(s) only and do not necessarily reflect those of the European Union or the European Research Council Executive Agency. Neither the European Union nor the granting authority can be held responsible for them. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2025.02150 .