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The Behavioral Strategies Of Platform In The Perspective Of Two-sided Markets

Posted on:2009-07-17Degree:MasterType:Thesis
Country:ChinaCandidate:Q HuFull Text:PDF
GTID:2189360245994277Subject:Industrial Economics
Abstract/Summary:PDF Full Text Request
Theory of Two-sided Markets, to which is paid attention by international economic and industrial circles just from 21st century, and which is based on theories of network externalities and multi-product pricing, is a brand new doctrine. But, this field has rich connotation and potentially important guiding significance to economy practice; therefore, it can be entitled to an exotic flower in theory of industrial organization. On the basis of available literature, the paper first comprehensively summarizes primary concepts and important characteristics, and thinks that non-neutrality of price structure and cross-side network externalities are not on the same layer, but the relationship between phenomena and essence. Furthermore, the non-neutrality of price structure is just external manifestation of cross-side network externalities, and the latter is the essential attribute of Two-sided Markets. In order to give prominence to the essential attribute of Two-sided Markets, the paper defines Two-sided Markets by three aspects jointly, which consist of architecture, non-neutrality of price structure and cross-side network externalities.With deep development of economy and society, more and more business modes put up some Two-sided Markets attributes, therefore, as the following, the paper briefly analyzes the role and necessity of Two-sided Markets in the process of business mode evolution. The peculiar properties of Two-sided Markets bring out the platforms new behavioral strategies that can not explained by traditional theories. The fourth part of the paper briefly introduces several familiar behavioral strategies of platforms, such as "chicken-or-egg" logic, skewed pricing, cross subsidy, bundle as well as regulator's role and so on. Furthermore, this part induces and summarizes the issues on anti-trust of platforms that deeply perplex the Two-sided Markets, taking credit cards as an example.Dynamic modeling is the tendency of research of theories of Two-sided Markets, the sixth part of the paper, in terms of "chicken-or-egg" logic, analyses the equilibrium path of platform original size under the impact of feedback effect through a dynamic system, and concludes that platform original size has great impact on the future growing of a platform, even determines the survival or death of a platform. When original size of a platform surpasses the crucial lines, centripetal force is larger than centrifugal force, and the platform will expand stepwise under the impact of positive feedback effect, vice versa, the platform will extinct gradually. Furthermore, the paper thinks that the platforms which are in an unfavorable situation can still reverse it through taking effective measures actively, and proposes that there are at least seven strategies, such as integration, M&A, strategic alliance, franchise and so on, can achieve the goal, thereby, the behavioral strategies of platforms can be unified into the theoretical model.
Keywords/Search Tags:Two-sided Markets, Behavioral Strategies, Dynamic System, Feedback Effect
PDF Full Text Request
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