Optimal pricing and choice of platform advertising schemes considering across‐side network effect

Zhou, Yongyi; Zhang, Yulin; Wahab, M.I.M.

doi:10.1002/mde.3438

Cited by 6 publications

(1 citation statement)

References 47 publications

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“…They find that although surge pricing scheme is not optimal, it can generally achieve a near-optimal profit. Zhou et al (2021) explore the impact of cross-side network externality on the pricing strategy of a service sharing platform. They point out that service price depends on cross-side network externality and increases monotonically.…”

Section: Literature Reviewmentioning

confidence: 99%

The entry quality threshold setting and commission rate contract selection of a peer-to-peer service sharing platform

Chi

Fan

Wang

2022

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PurposeIn recent years, some peer-to-peer (P2P) service sharing platforms have improved their service quality by setting an entry quality threshold for service providers. Considering consumers' heterogeneous preferences for service quality and commission rate, it is worth studying how to select the commission rate contract for a P2P platform under a predetermined entry quality threshold for service providers.Design/methodology/approachIn this study, the platform's profit-maximizing model is constructed under two proposed contracts: unilateral commission rate contract and bilateral commission rate contract. The optimal entry quality threshold and the optimal commission rate are obtained. This study also explores the impacts of cross-side network externality and service price on a platform's optimal decisions and social welfare.FindingsResults show that it is always advantageous for the platform to adopt the bilateral commission rate contract, which is closely related to the strength of cross-side network externality, service price and quality sensitivity coefficient. Under certain conditions, adopting the unilateral commission rate contract can reduce platform profit and service provider surplus, and improve consumer surplus and social welfare.Originality/valueThis study analyzes the unilateral commission rate contract and the bilateral commission rate contract of the platform, and discusses which contract is beneficial to the platform, consumers and service providers. In addition, this study provides a basis for the operation decision of a P2P service sharing platform and the pricing decision of service providers.

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Section: Literature Reviewmentioning

confidence: 99%

The entry quality threshold setting and commission rate contract selection of a peer-to-peer service sharing platform

Chi

Fan

Wang

2022

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Platform investment and seller competition in two-sided markets

Angelini,

Castellani,

Zirulia

2024

J Econ

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Platforms can create value within their ecosystems through their investments. In this paper, we model a monopolistic platform choosing the level of a demand-enhancing investment and the membership fees that sellers and buyers pay to access the platform. We find that platform size and quality are large when the degree of product differentiation among sellers and investment productivity are high. Platform profit and users’ surplus are aligned. If the platform sells a product under its brand, incentives to invest are higher, compared to a pure marketplace, and sellers’ surplus can be larger if the degree of product differentiation is low.

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Multi-objective mixed integer programming modelling for closed-loop supply chain network design: an enhanced Benders decomposition algorithm

Liu,

Ji,

Wahab

et al. 2024

Engineering Optimization

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Optimal pricing and choice of platform advertising schemes considering across‐side network effect

Cited by 6 publications

References 47 publications

The entry quality threshold setting and commission rate contract selection of a peer-to-peer service sharing platform

The entry quality threshold setting and commission rate contract selection of a peer-to-peer service sharing platform

Platform investment and seller competition in two-sided markets

Multi-objective mixed integer programming modelling for closed-loop supply chain network design: an enhanced Benders decomposition algorithm

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