Pricing Mechanism Of Two-sided Market Research Platform

In the process of rapid development of the global economy, with a grow of two-sided market characterized enterprises, such as newspapers, shopping malls, portals, etc. The research of for the effect of cross-networkexternality is also gradually deepened nearly two decades, and get the formation of two-sided market theory. Two-sided market theory extends the perspective of the theory of industrial organization, that is, in the traditional sense from the study of the relationship between manufacturers and consumers of the pure price and demand into the impact of two-sided market platform for the transaction and price. The two-sided market perspective to study the pricing and profit issues of these industries will change the view of many traditional industrial organization theory. It will have a profound impact on the future of enterprise management, enterprise competitive strategy.From the online game market, the users’demand for online gaming platform depends on the features of the platform, the quality of its games, and the impact on the existing platform user scale. From the definition of the two-sided market, we started with empirical test of the market whether it not only belongs to the scope of the two-sided market and has the basic features of the two-sided market, but also has some unique characteristics of the market, such as part of the multi-homing, vertical integration, these need further analysis to explore.In this paper, consider the two-sided market multi-player monopoly platform’s pricing strategy and vertical integration issues are based on Salop model. First, we summarize the basic framework of two-sided market which used Salop model, specifically divided into four cases. Then in the condition of all users on both sides are single-homing, discuss the price and profits of platform for the user are priced one-time registration. Based on these analysis, in terms of vertical integration, discuss how the platform pricing mechanism changes. The conclusions indicate that whether vertical integration strategy is necessary to the platform profit which is refer to competition of consumers in the market.