The Research On Competition And Regulation Of E-commerce Based On Two-sided Markets Theory

At present, the research on two-sided markets is in the ascendant, in the transaction, some trading activitis in market must be conducted on a platform. This platform Develop a pricing strategy to sell the platform product or service to the traders (such as consumers and businesses), and try to make them achieve transaction on the platform. We call the industry markets with these characters two-sided markets. There are many industries with above characteristics. For example Computer operating systems manufacturers, to provide a computer operating system platform To the two consumer groups (consumers and software developers), Consumers use computer operating system to run developers' software applications, and software developers must also be by means of computer operating system to attract customers; E-commerce platform is also the case, it provides trading services for both parties, both parties through trade platform can promote mutual understanding and trade agreement.In economics, the discussion of monopoly in most based on the single market. For Platform in the two-sided markets, free competition will also cause the monopoly. But at present, anti-trust regulations are formulated for the unilateral enterprises which in the free market. Due to the lack of theory, if making judgments in accordance with unilateral market, it will result in errors in judgment inevitably. Just based on this, this thesis'research contents are the competition and regulation about the E-commerce platform enterprise in two-sided market.With the rise of the Internet information industry, the Chinese E-commerce has seen rapid development, after 10 years of development it has entered a period of rapid growth. Since August 1999, when eBay was founded, China's C2C market has been in a pattern of oligopoly. So far as concerned, the market has not only eBay and Taobao, but is now mainly composed of four oligarchs:Taobao, Tom eBay, Tencent and Baidu. Study of the operation of E-commerce platform competition mechanism and E-commerce platform issue of Industry Regulation, has become a major topic in economics.From the view of industrial characteristics, E-commerce platform is typically some kind of two-sided market, but it also has its own unique features of the industry, for example,third-party payment authentication platform and logistics platform are also have the feature of two-sided market, But it is integrated in E-commerce platform. Whether the relationship between them is competition or cooperation, whether integration' efficiency is higher than the non-integrated? Whether can improve the social welfare? In addition, the trading JiFenZhi increased consumers' value evaluation of network. But due to the network can't be interconnected; it increased the tendency of the multi-platform transaction. JiFenZhi transaction increased transfer costs for consumers, and increased entry barriers to the industry. From the perspective of the existing literature, most of the researches on two-sided market are two-sided asymmetric price structure and pricing mechanism, for the competition and cooperation between different platforms, especially the systematic research on non-integrated Modular Production System between different platforms is few. Most studies of E-commerce platform, using it as a normal network enterprise, the study confined to the industrial structure and profit model, etc. And to leave it as an object of study of two-sided networking platform, as well as their competition and regulatory countermeasures research, yet there is no systematic research literature.The topics of this paper are under such background, using SCP paradigm of Industry organization, game theory and the case analysis, explore the internal operating mechanism and pricing mechanism of E-commerce platform industry, Analysis of its market structure, researching firms strategy behavior In the competitive market, And to analyze their performance and social welfare, Finally puts forward corresponding countermeasures on E-commerce regulation. This paper aims at making theoretical exploration on operation mechanism and competition strategy of E-commerce platform industry, aslo to provide theoretical support for principles of industry Regulation about E-commerce platform. This is the significance and value of this study.There are eight chapters in this paper. Research contents and achievements are as following:Chapter 1 is introduction; mainly introduces background and significance of research, establishs contents and methods, and puts forward innovations of this paper.Chapter 2 is the summarization of two-sided markets theory. Based on the theory of two-sided markets, making economical explains to the two-sided markets. Giving the economical analysis from emerge of two-sided markets, and the relationship between platform and market, and the centralized transaction by using the theory of institutional economics,to explain why the two sides will focus on platform, how to ensure the production and who Provide the platform Services. Using the urbanization theory of new classical economics, the reason of concentrated exchange is focusing on trading platform can improve the efficiency of the transaction or that transaction costs can be reduced. Finally, give a scientific division to the market structure type of two-sided markets.Chapter 3 analyzes the pricing model of platform. By the analysis of monopolistic competition pricing models and summary from Rochet and Tirole (2003), Armstrong (2004) and other literature, the basic assumption has made to Pricing Model of E-commerce. Using economics theory to explain the indirect network externalities and direct the economics network externalities, distinguished money externalities and technology externalities. According to the derivation of theoretical models, we hold that the interconnection of E-commerce platform could improve the social welfare.Chapter 4 mainly analyzes horizontal competition in the platform. Horizontal competition in the platform of the study, this view can not be interoperability between platforms are the main factors that led to entry barriers and market forces, the incumbent enterprises have a large client base formed a strong network externalities, forming a larger market for barriers to entry.As the network is not compatible and can not interconnection, so that users can not enjoy the benefits of bilateral market cross-network externalities, resulting in the loss of social welfare. Competitive platform for interconnection between the networks,achieve cross-platform transactions between users, reduce market entry barriers to the market regain monopoly to a competitive market structure,contribute to technological innovation and social welfare improvement.Chapter 5 discusses swiching cost and multi-homing of two-sided markets. The transfer of costs from the perspective of E-commerce platform vendors exist in the user access behavior of multi-platform vendor competition.The assumption that the cost of the transfer of exogenous circumstances, through the platform is compatible with different levels of the two levels of E-commerce platform for pricing and competition analysisConsidered at different levels compatible platform, E-commerce platform pricing is different, and its level of benefits would change with the transfer of costs. Proposed two levels of E-commerce platform compatible.The first level is the transactional database sharingThe second level of compatibility is based on the first level transactional database the shared network interconnection, users can cross-platform to deal.Through the different transfer cost E-commerce platform, under the analysis of pricing and profits obtained, when the switching costs exist, a single platform to access to utility is greater than the effectiveness of multi-platform access, advanced users will be locked in the original platform.From the whole market, are classified into two levels, a monopoly market and oligopoly market.In the first level of compatibility conditions, the transaction cost of credit will be not exist. At this point, users who have a higher evaluation with the network will select multi-platform access.In the realization of two levels under the conditions of compatibility, users can cross-platform deal.Then, the user would not exist multi-platform access behavior.From social welfare perspective, the latter is larger than the former.Chapter 6 mainly discusses the possibilities of network governance of E-commerces. With transaction cost theory analyse the conditions and the possibility that E-commerce platform for non-integrated management, the E-commerce search platform is dominant firms in this system and module suppliers should be paid platform, CUP and logistics platform. Under the rules and standards that the leading enterprise search platform to develop E-commerce, between the values of module is competition. With "back to back" compititation, Studies have shown that the modular is more efficiency than the integration and modular can lead to more consumer surplus for consumers, E-commerce platform has choice the integration, rather than the modular, it is because that indirect network externalities between system modules.For E-commerce search platform and business integration of third-party payment platform, expansion of the market of any one will bring even greater barriers to entry and market power.Chapter 7 is a study of regulation and countermeasures of E-commerce platform. Through the analysis, this paper from the critical capacity, positive feedback, path dependence, switching costs, lock and integration factors, discussed the major E-commerce market entry barriers, proposed regulatory response to E-commerce platformFirst Interconnection. As the primary purpose to promote the trading platform services, due to network externalities and non-compliant factors make the bilateral customers can not cross-platform transaction, as the main factors constraint to more competition and lower social welfare. Therefore, interconnection can reduce market entry barriers to the market regain monopoly to a competitive market structure, contribute to technological innovation and social welfare improvement. Second, the modular network production.Integration will improve market access barriers, after that, the manufacturers want to have the same competitiveness, must enter two or more markets, or face a competitive disadvantage.In particular, if the integration is platform that two complementary, then the barriers to entry would be strengthened due to indirect network externalities. At the same time, the incumbent firms can take cross-subsidies to combat a potential entrant.Non-integrated production can increase productivity, reduce barriers to entry and promote competition and benefit consumers surplus and improve social welfare.Chapter 8 briefly sums up the basic conclusions, put forward some shortcomings, and discusses the further study of this paper.