Steering in One Click: Platform Self-Preferencing in the Amazon Buy Box

Abstract

Online platforms can strongly influence consumer behavior through default options, creating incentives to steer consumers to the platform’s own products and services. I examine how Amazon determines which merchant is the default option on the Amazon Buy Box. Using data on hundreds of thousands of products and several countries, I show that the Amazon platform substantially prioritizes its retail arm and fulfillment arm in the recommendation algorithm. Both Amazon’s preference for its fulfillment arm and its retail arm have large effects on the default platform price and share of third-party merchants winning the Buy Box.