From The Perspective Of Bilateral Tying Case Network Group-buying Platform Companies' Pricing Strategy In Our Country

Online group buying is now one of the fastest growing network applications in the network economy in China. Although online group buying has developed rapidly, competition between the online group buying platforms is more and more fierce, which is far from reaching equilibrium. Domestic online group buying market is still in the stage of the customer training, and in order to expand the buy consumer scale, the online group buying platforms often offer additional utility to consumers through the tying strategy.Based on the perspective of two-side market and using the game theory model, this paper studies the effects of tying strategy in the competition between online group buying platforms of Web2.0era. This paper mainly raised and resolved three problems with Chinese online group buying market as research object. First, will different online group buying platforms use different tying strategies? Second, would tying strategy improve the platform’s pricing power, market share and profit? Third, in a competitive environment, how would the degree of product differentiation, cross-network externalities, and the net utility of the tied product affect the online group buying platform’s tying strategy?Firstly, this paper analyze the two-side market characteristics of the online group buying market and lists the different tying strategies of the online group buying platforms according to different dimensions, which lays the foundation for research of the online group buying platform’s tying strategy from the theoretical model.Secondly, in this paper the tying strategy of the online group buying platform in the monopoly structure is discussed under the assumption that the number of the user is a linear function of the user’s utility. In the monopoly market structure, tying strategy does not necessarily always improve the online group buying platform’s pricing power, market share and profit.Finally, this paper explores platform’s tying strategy in the competitive market structure. Under both the single homing and multi homing situations, a game theory model is built to study the competition between different online group buying platforms. Whether the platform can improve its pricing power, market share and profit is affected by the degree of product differentiation, cross-network externalities, and the net utility of the tied product.