Sellers’ Peer Comparison Under Uncertainty in Online Marketplace

); While sellers' behind-aversion further aggravates the uncertainty effect and encourages them to take more aggressive actions, their ahead-seeking counterbalances the tension by absorbing part of it into the comparison effect and moderating the marginal disutility of lagging behind. Overall, we find that peer comparison can intensify sellers' price competition, which lowers the expected profits and utilities for both sellers, benefits the consumers, and reduces the hosting platform's profit. Our main insights are robust in a number of extensions, including general demand specifications, seller asymmetry, sellers' misperceptions of market uncertainties, and consumers' reference-dependent decision-making. They highlight the importance of sellers' behavioral regularities in online platforms' daily operations and shed light on marketplace designs regarding algorithmic transparency, information sharing, and so forth.