Information and two-sided platform profits

Hagiu, Andrei; Hałaburda, Hanna

doi:10.1016/j.ijindorg.2014.04.001

Cited by 150 publications

(119 citation statements)

References 19 publications

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“…In recent years, there are scholars paying more attention to the non-price characteristics of two-sided market. Hagiu and Hałaburda [23] find that market power influences the effect of different levels of information on two-sided platform profits. In other words, a monopoly platform prefers facing more informed participants, while a competition platform has the opposite preference.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimal Quality Strategy and Matching Service on Crowdfunding Platforms

Huang

et al. 2018

Sustainability

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This paper develops a crowdfunding platform model incorporating quality and a matching service from the perspective of a two-sided market. It aims to explore the impact of different factors on the optimal quality threshold and matching service in a context of crowdfunding from the perspective of a two-sided market. We discuss the impact of different factors on the optimal quality threshold and matching service. Two important influential factors are under consideration, simultaneously.One is the quality threshold of admission and the other is the matching efficiency on crowdfunding platforms. This paper develops a two-sided market model incorporating quality, a matching service, and the characters of crowdfunding campaigns. After attempting to solve the model by derivative method, this paper identifies the mechanism of how the parameters influence the optimal quality threshold and matching service. Additionally, it compares the platform profits in scenarios with and without an exclusion policy. The results demonstrate that excluding low-quality projects is profitable when funder preference for project quality is substantial enough. Crowdfunding platform managers would be unwise to admit the quality threshold of the crowdfunding project and charge entrance fees when the parameter of funder preference for project quality is small.

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Section: Literature Reviewmentioning

confidence: 99%

Optimal Quality Strategy and Matching Service on Crowdfunding Platforms

Huang

et al. 2018

Sustainability

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“…Both of them are extensions of the previous models. In the first case, we consider the two-sided market proposed by Hagiu and Hałaburda (2014) in which two platforms compete in prices for users and developers. This model can be (1)…”

Section: Externalities: Two-sided Marketsmentioning

confidence: 99%

Agent-based models and industrial organization theory. A price-competition algorithm for agent-based models based on Game Theory

Sánchez-Cartas

2018

Complex Adapt Syst Model

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Purpose: Simulating markets using agent-based models must consider pricing. However, the strategic nature of prices limits the development of agent-based models with endogenous price competition.Methods: I propose an agent-based algorithm based on Game Theory that allows us to simulate the pricing in different markets. I test the algorithm in five theoretical economic models from the industrial organization literature. Results:In all cases, the algorithm is capable of simulating the optimal pricing of those markets. It is also tested in two more cases: one in which the original work fails to predict the optimal outcome, and another one that is quite complex to solve analytically. Lastly, I present two potential extensions of this algorithm: one dynamic, and another one based on quantity competition. Conclusions:This algorithm opens the door to the extensive inclusion of pricing in agent-based models, but also, it helps to establish a link between the industrial organization literature and the agent-based modeling.

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“…The concept of two-sided market has been introduced to describe the network effects in a platform based industry (Varian and Shapiro 1999, Rochet and Tirole 2003, Hagiu and Ha\laburda 2014. For example, the apple's online apps store, the more apps available, the more customers would like to subscribe on this platform.…”

Section: Two-sided Marketmentioning

confidence: 99%

Managing a Supply-Chain Based Two-Sided Market

Rong

Liu

Lin

2016

AMPROC

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Abstract:This paper develops a theoretical model of positive monopolist who organizes a two-sided market in the IP license industry. This model indicates, as a platform owner, they faced a new phenomenon that developers' side acts as a supply chain of firms instead of single firm. They have to deal with network effect between developers and customers, but also within the supply chain. We have developed models by adopting license fee and royalty fee to facilitate such network effects among supply chain and customers in the platform ecosystem. This article specifically enriches the two-sided platform by introducing supply-chain based side.Some practical implications also provide for platform owners who want to set up their platform ecosystem by licensing their IPs. This result could also be able to explain why Intel adopted a close supply chain in the PC industry while ARM adopted an open platform model in the mobile industry as a positive monopolist.

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Information and two-sided platform profits

Cited by 150 publications

References 19 publications

Optimal Quality Strategy and Matching Service on Crowdfunding Platforms

Optimal Quality Strategy and Matching Service on Crowdfunding Platforms

Agent-based models and industrial organization theory. A price-competition algorithm for agent-based models based on Game Theory

Managing a Supply-Chain Based Two-Sided Market

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