Platform pricing with endogenous network effects

• Main Authors: LIN, Mei, WU, Ruhai, ZHOU, Wen
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: Two-sided platforms; subsidy; variety; quality; network effects; vertical differentiation; Computer Sciences; E-Commerce; Management Information Systems
• Online Access: https://ink.library.smu.edu.sg/sis_research/3737; https://ink.library.smu.edu.sg/context/sis_research/article/4739/viewcontent/PlatformPricingEndoNetworkEff_2014.pdf
• Institution: Singapore Management University

This paper examines a monopoly platform’s two-sided pricing strategy through modeling the trades between the participating sellers and buyers. In this approach, the network effects emerge endogenously through the equilibrium trading strategies of the two sides. We show that platform pricing depends...