Research On Competitive Pricing Strategy Of Multilateral Platform

As a typical representative of the combination of Internet Plus and traditional industry, the business model of platform has brought great economic benefits to the society and profound transformation to the traditional industries. The rapid expansion causes serious competition between platforms. It has become a vital problem to the platform enterprises and also a hot spot to the platform research that how to choose the pricing strategies, set a proper price for the multi-sided users, remain competitive and extend the market share.Focusing on the pricing strategies of multi-side platforms in the competition, this study expands the platform research from two-sided markets to multi-sided platforms. By building a game model based on Hotelling model about competition and pricing strategies of the multi-sided platforms with partial users’ multi-homing behavior, this thesis concretely analyses the influences of network externality and multi-homing behavior to the pricing, market distribution, and profit of the platform.The results are as follows.(1) The pricing for multi-sided users is a comprehensive problem that the price for one side will affect not only the amount of users on this side, but also on the other sides; The platforms tend to set a lower price for the users which are more competitive and the ones which bring a bigger externality to the other sides.(2) Platforms would raise the price of the single-homing side and lower the price of the multi-homing side because of the externality brought by the third side to the existing multihoming side; The entrance of the third side into the competition would stimulate the users’ multi-homing behavior and increase the number of multi-homing users; The platform which introduces the third side actively would break the competition bottleneck, and take more market share, profits and advantages than its competitor.(3) The externality brought by content providers to the audiences will reduce platforms’ profits, while the negative externality from advertisers to the audiences will improve it; The externality brought by content providers to the audiences has no influence on the price and the number of multi-homing of the advertisers; The price and market distribution are affected deeply by a series of externalities.