Original title: see "two election one", how should we look at it?
In the twinkling of an eye, October was more than half, and it was less than a month from "double eleven". The big business providers are actively preparing for the "double eleven", and have opened a war of words.
Recently, the co-founder of Pingduo Dada issued a message in the circle of friends denouncing rival Tianmao, saying that Tianmao forced businesses to "choose one from two", resulting in a large number of businesses quit Pingduo's third anniversary celebration. Interestingly, after Dada's allegations were made, Dada himself was accused of "choosing one from two". On October 11, CEO Zhang Zhengping of Taoji, an e-commerce platform, shouted in the circle of friends, "Spell more, please stop your performance, stop asking the merchants to"choose one from two"and stop the thieves crying to catch thieves!" For a while, several colleagues quarrelled together.
If we look back at the news about platforms in recent years, we can see that "two options" is definitely a high-frequency word. Far away, the "3Q war" that shocked the entire Internet community originated from a "two-choice one"; near, there have been disputes involving "two-choice one" between Tianmao and Jingdong, between the United States Troupe and drip, between the United States Troupe and hungry. How should we look at the phenomenon of "two elections and one election" frequently occurring? How should we deal with it in terms of policy? This is indeed a question worth pondering.
Possible danger of "two elections"
Many people believe that "two or one" is a disorder in the process of platform competition, which will interfere with the normal business environment and harm the interests of merchants and consumers.
It should be said that this view does have some economic theoretical basis. In the industrial economics and anti-monopoly literature, the scientific name of "alternative" is "Exclusive Deal-ing", which refers to enterprises through contracts and other means "restrict the counterparty to trade only with them or only with their designated operators to trade". In reality, this phenomenon often occurs between upstream and downstream enterprises, so it is a reflection of the vertical control behavior between enterprises.
"Exclusive trading" will affect many stakeholders at the same time: first, "Exclusive trading" will have multiple negative effects on the "exclusive" competitors. If there is only one major supplier in the upstream of an industry, then any enterprise can take the entire industry's market revenue by signing exclusive agreements with that supplier, and its competitors can only sigh. Even in this industry, the upstream suppliers are not exclusive, and some companies can hit their competitors hard enough by signing exclusive agreements with a few of the best and cheaper suppliers. As a result, its rivals will have to choose to buy from higher-priced suppliers, which have a congenital disadvantage in terms of cost. Second, "exclusive trading" will increase the restrictions on the object of the transaction, so that their choice space becomes smaller. Finally, "exclusive trading" may have a negative impact on consumers: on the one hand, the existence of "exclusive trading" restricts the channels of transactions, which may allow manufacturers and sellers to better achieve collusion, thus seizing the interests of consumers should be; on the other hand, a single channel of transactions will also make transactions become. More trouble, so that consumers need to pay higher transaction costs in the transaction process.
To sum up the above factors, "exclusive trading" seems to be an "exclusive" behavior at the cost of "losing more" to the stakeholders of all parties in exchange for their own interests. It is based on this understanding, many businessmen and scholars have criticized this behavior, and called for the use of legal means to stop or restrict it. But is this really the case?
Promoting cooperation with "two elections"
Let us temporarily cast aside our thoughts on heavy topics and take a look at the following story:
Zhang San is an excellent tailor and he is a good tailor. Considering that he was too tired to sell and would diversify the efficiency of making clothes, he decided to give his clothes to the clothing store in the town for sale. There are two clothing stores in town. One is Li Sikai and the other is Wang five. Zhang San is confident that two clothing stores can sell their own clothes in a special counter. But strangely enough, two clothing stores rejected him.
Zhang San was very angry and ran to Li four to go to Tucao: "why do you refuse to sell my clothes? My skills are the best in this town! I am willing to pay you the rent of twenty thousand yuan per month! This is not too low! "
"Zhang San, I know the rent of 20,000 yuan is not low, but you know, although your brand is good, customers do not know. If I set up a special counter for you to sell, I'll help you advertise and promote. It may cost 100,000 yuan first, which is a big cost! "Brothers, we must put a long-term perspective on it. One hundred thousand yuan is just a one-time investment. You'll make money in a few months! " Zhang San said. "Well, maybe. But if I put in one hundred thousand yuan, I will make your popularity known. Then Wang Wu of the door told you that if you only rent for ten thousand yuan, how would you consider it? I think you will go to that guy without hesitation. Then did I not spend one hundred thousand yuan? Li four said helplessly. "So it is! Then let's sign a contract to stipulate how I will sell exclusively to you later. Are you willing to be my distributor now? " Zhang Sandao. "Oh, I'm relieved! Happy cooperation!
This little story is of course fabricated, but the truth contained in it is worth considering. In this story, although Zhang San wants someone to sell his product and is willing to pay the seller, no clothing store is willing to take over. Why is that? The fundamental reason is that if they sell Zhang San's clothes, they need to pay a sum of investment to promote it. In the aftermath, Zhang may abandon his original promoter and choose a lower-cost channel for sales. What's more, once Zhang San finds another partner, his original investment in it will become sunk costs and can no longer be recovered.
In economics, such investments that produce value only in the process of promoting Zhang San, but can not be used for other purposes, are called "Relationship Specific Investment" and Zhang San's possible hexagram-changing behavior is called "opportunistic behavior". When cooperation between several subjects needs to be maintained for a period of time, one of them may, depending on the development of the situation, abandon the original agreement and engage in "opportunistic behavior". If the other side has made a "relationship-specific investment" for cooperation, then he can use the pretext of changing the hexagram to threaten each other, and ask to negotiate with the other side again, re-dividing interests. Obviously, the opportunistic behavior of the other party is a risk that must be taken into account for the "relationship-specific" investment in the cooperation. If this risk is too large, he may even choose to give up cooperation in order to prevent risks. In our story, Li four and Wang Wu refused to underwrite Chang three's clothes. That's why.
In order to achieve cooperation and promote investment in relational-specific assets, people have come up with ways to prevent opportunistic behavior. A representative idea is integration, with one party responsible for investing in "relational specific assets" acquiring the other party for cooperation. Economists Stanford Grossman, Oliver Hart and John Moore used this view to analyze mergers and acquisitions between firms, and proposed the famous GHM model, in which Hart later won the Nobel Prize in economics.
However, the cost of using integration to prevent opportunism is obviously too high. Therefore, in reality, people usually choose another alternative solution - to conclude a contract to deal with this problem. In our story, Zhang San and Li Si used this method to prevent Zhang San's possible opportunistic behavior, thus promoting the achievement of cooperation. It should be pointed out that in the context of the story, Zhang San can only choose one between Li Si and Wang Wu to sign a contract. Therefore, this kind of behavior in order to prevent opportunism and promote cooperation is a "two-choice" contract.
Admittedly, when Zhang San and Li Si sign the "two-choice-one" contract, it may produce all the negative effects we mentioned earlier. But if they don't sign the contract, the deal may not happen at all - Zhang San has no one to sell his clothes, Li Si and Wang Wu have no clothes to sell, and consumers can't buy Zhang San's clothes. If compared with such a situation, the situation before is already an improvement. The so-called "two evils are relatively light", at this time, allowing the existence of "two alternatives" can actually enhance cooperation and improve the efficiency of resource allocation.
Solving the problem of "double marginalization" with "two election one"
In addition to addressing opportunistic behavior and facilitating cooperation between suppliers and vendors, "exclusive trading" can also promote efficiency improvement through other means.
First, reduce transaction costs. This is quite obvious. When suppliers and sellers sign exclusive agreements, they do not need to look for other partners, which saves them search costs in the transaction process, and therefore will help improve efficiency.
The two is the solution to the problem of "Double Marginalization". Goods are produced from manufacturers and need distributors to reach consumers. In this process, the manufacturer will first make a price premium on the basis of manufacturing cost, and then sell it to the dealer. The dealer will further add another price to his purchase price and sell it to the consumer. In this way, the final price that consumers see is the result of two (or more) price increases, which are called "double (or multiple) marginalization" in industrial economics.
Theoretical studies have shown that if each firm priced individually in the above process, the final price would be higher than the price agreed between upstream and downstream. And according to the law of demand, higher prices will make products sold less, and eventually the entire industrial chain will generate less profit. The theory seems abstract, and we can use an example given by Nobel Prize laureate Tyrol to help us understand that in the Middle Ages, because Europe was politically divided, there might have been barriers set up by several states on a river, each of which was taxed independently. In this way, when goods are transported from upstream to downstream, heavy taxes are required. Later, political unification was achieved in some parts of Europe, and these unified countries revoked redundant checkpoints on rivers and changed to one-off taxation. As a result, the apportionment is made in each order.
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