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Pricing and Service Strategies for Two-sided Platforms

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Abstract

Nowadays, more and more transactions or interactions like online dating and shopping are completed on two-sided platforms involving two groups of agents. On these two-sided platforms, there often exist cross-network effects, i.e., the benefits that agents at one side receive are positively related to the number of agents at the other side, and vice versa. This paper considers such two-sided platforms, where the platforms offer a certain service to attract agents of both sides to join the platforms, and then charge agents who join the platforms a lump-sum fee to gain the profit. We present service and pricing strategies for both monopolistic and duopolistic platforms, respectively. We also investigate the impact of platforms’ life cycle on their service and pricing strategies. Some managerial implications are shown.

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Acknowledgments

The authors thank the editor(s) and two anonymous referees for their comments and suggestions, which are very helpful to improve the quality of the paper. Chuanying Chen is the corresponding author. This paper has been supported by the National Natural Science Foundation of China under grant NOs. G71520107001, G7187010221 and G11771149.

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Authors and Affiliations

  1. School of Business Administration, South China University of Technology, Guangzhou, 510641, China

    Xiaogang Lin, Chuanying Chen, Zhaozhan Lin & Yongwu Zhou

Authors
  1. Xiaogang Lin
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  2. Chuanying Chen
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  3. Zhaozhan Lin
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  4. Yongwu Zhou
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Corresponding author

Correspondence to Chuanying Chen.

Additional information

Xiaogang Lin is a Ph.D. candidate of School of Business Administration at South China University of Technology (SCUT), Guangzhou, Guangdong Province. He received his BS degree in Information and Computing Science from Guangdong University of Finance & Economics in 2013. His areas of expertise include operations management in the sharing economy and pricing in two-sided markets.

Chuanying Chen is a Ph.D. candidate of School of Business Administration, South China University of Technology (SCUT), Guangzhou, Guangdong Province. He received his BS degree in Industrial Engineering from South China University of Technology in 2013. His areas of expertise include sharing economy, operations management in online shopping platforms and consumer behavior.

Zhaozhan Lin received his MS degree in Management Science and Engineering from School of Business Administration at South China University of Technology (SCUT), Guangzhou, Guangdong Province. His areas of expertise include sharing economy, logistics management and inventory management.

Yongwu Zhou is a professor of School of Business Administration at South China University of Technology (SCUT), Guangzhou, Guangdong Province. He received his Ph. D. degree in Management Science and Engineering from Hefei University of Technology in 2002. In 2013, he got second prize of outstanding achievements in humanities and social sciences. His areas of expertise include inventory model and associated methods, supply chain management and optimization methods.

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Lin, X., Chen, C., Lin, Z. et al. Pricing and Service Strategies for Two-sided Platforms. J. Syst. Sci. Syst. Eng. 28, 299–316 (2019). https://doi.org/10.1007/s11518-019-5409-9

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  • DOI: https://doi.org/10.1007/s11518-019-5409-9

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