Study On Dynamic Pricing Strategy Of Platform Enterprise

The platform enter:prise is a form of organization between the market and the traditional enterprises,which is developed in the background of the economic globalization and the wide application of information technology.It is like the market,which allocates resources by connecting supply and demand,as well as the traditional enterprise which pursue enterprise profit maximization.In the past 30 years,in the United States,then in Europe and Asia,a wave of new economy has emerged.In this process,some typical enterprises have played a great role in promoting the social and economic development Such as e-commerce enterprises(Amazon,Ebay and Alibaba etc.),bank card networks(Visa,Master and China Unionpay etc.),operating system companies(Microsoft,Apple and Palm etc.),search engine enterprises(Google,Yahoo and Baidu etc.),media enterprises(newspapers,TV channels with advertisement and portals website etc.),smart phones enterprise(Apple,Nokia and Google etc.),and video game enterprises(Sony,Nintendo and Microsoft etc.)are occupy an important position in the modern national economy.Behind these seemingly unrelated enterprises,containing some common economic laws:these enterprises usually serve as a platform for attracting a class of(or more)agents to the platform,and through the interaction between these different agents to provide services for profit.For example,E-commerce enterprises provide services for transactions between buyers and sellers;Bank card networks provide services for payment between cardholders and merchants;Operating system provide a platform for users to use the application software;Search engines provide a platform for searching users to communicate with advertisers;Media provides a platform for users to communicate with advertisers;Smart phones provide a platform for handset users to use application software on their mobile phones;Game consoles provide a platform for users and game makers.According to statistics,67%of the world's 100 largest companies with the largest market capitalization have received most of revenue from the platform.These platform enterprise are still in rapid development and will account for an increasing share of the world economy.With the rapid development of platform enterprise,it has attracted widespread attention from government agencies,managers and economists.In reality,the unique business decisions and competition methods of many platform enterprise have aroused great interest in the academic community,scholars have also conducted a great deal of research on the platform economy and related issues,such as platform pricing,platform management and regulation,and related mechanism design and so on.However,there is little literature on the dynamic pricing strategy of the platform.Since most of today's platforms are based on the development of information technology,information technology has been widely used in platform pricing.which enables the platform to classify different consumers more accurately.As a result,many new pricing methods have emerged,among which the most noteworthy is the "dynamic price discrimination".Dynamic price discrimination is when there is a repeat purchase in the market,the manufacturer can offer different prices to different consumers according to the past purchasing records of the consumers,and typically is that to set different prices for new and old customers.For example.China Mobile will offer free phone fee or mobile phone to new network users,while China Unicom will offer similar benefits to new subscribers.At the same time,e-commerce platfonns such as Jingdong Mall will also give coupons to newly registered users to attract more users to use their services;There is more representative of the case is that China Mobile travel market new users battle,in order to enable users to use their own taxi software travel,Didi Dache and FlashGet have invested heavily in subsidies to users,in order to faster access and lock new users;In addition,many P2P financial platform also provides various subsidies and coupons for new users,but there have no similar benefits for old users.Dynamic price discrimination may be applied to more industries with the further development of information technology and the emergence of new platforms.It is worth mentioning that,although scholars also have studied the dynamic price discrimination,less involved in network platform pricing.One of the important features of the platform is the network externality,some new conclusions may be obtained if this factor is taken into account.Therefore,it is of both theoretical and practical significance to study the dynamic pricing strategy of platform enterprise.Based on the above status,this paper takes game theory as the main analysis method,and builds a duopoly platform enterprise pricing game model,analyzes the impact of network externalities,consumer switching costs and pricing strategies on the market equilibrium.Firstly,this paper elaborates the relevant background and reality of the topic,the theoretical significance,and roughly summarizes the contents,methods and innovations.The end of this section introduce some basic concepts about the platform market,such as platform,network externalities,switch cost and price discrimination.Then this paper summarizes the research on the price discrimination and pricing of network platform separately,which serves as the starting point and foundation of this research.Based on this,we design a two period dynamic pricing game model to discuss the optimal pricing strategy of platform enterprises under two market conditions and two kinds of consumers' participation.In this model,we analyze the pricing strategy of the platform enterprise in mature markets firstly.This paper analyzes the optimal pricing and profit of each manufacturers under different strategy combinations,then compares the equilibrium of different markets and solves the Nash equilibrium.Then we assume that the market are both naive consumers,and then analyzes the pricing strategies of duopoly platform enterprise in emerging markets.By comparing and analyzing the optimal pricing and total profit of each manufacturer under different strategic combinations,the sub-game perfect Nash equilibrium is solved.Finally,we assume that the market are both sophisticated consumers,and then analyzes the pricing strategy of the duopoly platform enterprise in emerging markets.By comparing and analyzing the optimal pricing and total profit of each manufacturer under different strategic combinations,the sub-game perfect Nash equilibrium is solved.After the conclusion of the model,two case studies have been carried out in this paper.We conducted a case study in the fields of mobile payment and mobile communications,and then tested and supported the research results in this paper.At the end of this paper,we summarize the relevant conclusions and management apocalypses,and then it points out the lack of research and the direction of further research.Through the above research,this paper has obtained the following conclusions:First,if duopoly platform enterprises adopt dynamic price discrimination in a mature market,each enterprise will provide the same amount of discount for new customers,which is not related to the initial market share of each manufacturer.However,the initial market share of manufacturers will affect consumer expectations and the optimal pricing of each manufacturer,the initial market share of larger manufacturers will get more profits.If duopoly platform enterprise adopt unified pricing strategy,there will be unilateral consumer conversions.Consumers with larger initial shares will switch to purchase smaller initial shares products,whereas enterprises with larger initial shares will set higher prices and obtain higher profits.Compared with the duopoly platform enterprise have adopted dynamic price discrimination,manufactures under the unified pricing strategy will get higher profits.Second,when duopoly platform enterprises make price games in mature markets,there are two pure strategy Nash equilibriums and a mix strategy Nash equilibrium.Under the precondition of non-cooperative game,when the initial market share of each manufacturer and the network externalities satisfy certain conditions,duopoly platform enterprise adopt the dynamic price discrimination strategy as a stochastic steady state.At this time,duopoly platform enterprise may fall into some kind of "prisoner's dilemma".However,if the game is a sequential game,duopoly platform enterprise adopt unified pricing strategy as the only sub-game perfect Nash equilibrium.Fourth,if all the consumers is sophisticated in the emerging markets,the platform network externalities affect the enterprises's pricing and profits,and also affect the consumers' choices,thus affecting the subgame perfect Nash equilibrium of firm pricing game.When platform network externalities are weak,duopoly enterprises adopt unified pricing as the only sub-game perfect Nash equilibrium.If platform network externalities are strong,the game may appear multiple equilibrium.If the pricing strategy game between duopoly platform enterprise evolves into a coordinated game,the duopoly enterprises adopt unified pricing strategy as the pay dominate equilibrium of game,while the duopoly enterprises adopt the dynamic price discrimination strategy as the risk dominant equilibrium of game,Which is the stochastic steady state of the game.Compared with the market equilibrium under the assumption of naive consumption,duopoly enterprises adopt lower pricing and profits when they adopt the dynamic price discrimination strategy.However,if duopoly enterprises adopt unified pricing strategy,they will get higher profits.Compared with the existing research,considering the influence of network externality on the competition of platform enterprises,this paper builds a dynamic pricing game model and derives the optimal solution of the model.The results show that the pricing decisions of platform enterprise not only have relation with the initial size of the market,but also there may be multiple equilibrium solutions when the strength of the network externality is strong or weak,and the results enrich the theory research of dynamic price discrimination.At the same time,considering the difference of market maturity and the difference of consumers' rationality,this paper discusses the optimal pricing decision of platform enterprises under different market conditions and consumer combinations,which provides decision reference for pricing practice of platform enterprises.