| With the development of economy and the progress of the society, as well as the wide application of Internet, the two-sided markets is becoming more and more common, affecting people’s daily life, so it attracts more and more attention of scholars.In the two-sided markets, buyers and sellers are trading with the help of a platform. The platform provide products or services for buyers and sellers, and it makes money from buyers and sellers by makes pricing strategy. Moreover, buyers and the sellers are equivalent to two sides of the platform and an increase number in one side will attract an increase in another. To provide any service, the platform enterprise has to pay a cost. In fact, the platform enterprise usually charges one of the two sides a low price or even free. For example, The shopping center do not charge consumers any fees even offers free parking service, but in the shopping center charges shops high fees.For another example, search engines provide information to search engines users for free, but charge firms that release information through search engines high fees. The pricing behavior of charging a price below marginal cost could not be explained by traditional theory of the single market. At the same time, the pricing behavior is also suspected of predatory pricing. So we must seek a suitable pricing model to explain the pricing behavior of platform enterprises in two-sided markets. On one hand, the pricing theory of two-sided markets can be applied to many industries and it has important practical significance to explain some hot issues in economy. On the other hand, for the antitrust field, the platform enterprises in two-sided markets providing low-price or even free products could be suspected of predatory pricing, which urgently needs the support of the theory. On the basis of the basic theory of two-sided markets, The research on pricing behavior of platform enterprises could provide more specific evidence for further antitrust work and provide guidance for the practical case.After reading literature, I summed up the definition and characters of the two-sided markets, and classified the two-sided markets according to the function of platform enterprises. In this process, I found that the cross-network externalities is a remarkable feature of two-sided markets, and this feature directly affects the pricing behavior of platform enterprises, thus appeared price below the marginal cost or even free.Firstly, establish the pricing model of two-sided market from the perspective of cross network externalities and get the optimal pricing form of enterprises. Then, try to explain the pricing behavior of platform enterprise with the basic theory of two-sided markets and the conclusions of the pricing model, and this is the core content of this article. In the end, the comparison and distinction between the pricing behavior of platform enterprise and predatory pricing behavior is the extension and application of this paper.The main contents are as follows:First of all, I referred to literature on network externalities, basic theory of two-sided markets, pricing behavior of two-sided markets and the antitrust research of two-sided markets. And, I reviews the existing two-sided markets theory which become an important reference research. Then, I define the cross-network externalities and summarize the theory of two-sided markets including the definition, characteristics and classification, and this part is the theoretical support of the full text.Then, as the key part of this article, I establish pricing model of two-sided markets based on cross-network externalities which is the key factor influencing price. I respectively analyzes both monopolistic and competitive platform enterprises when they make price to maximize the profit. According to the above, I draw relevant conclusions to explain the economic reasons behind the pricing behavior.The conclusion is drawn through the models:for both monopolistic and competitive platform enterprises, cross-network externalities exist between users in two sides. For cross-network externalities, the platform may be free to users on one side, in order to attract more users of this side to the platform. Then, through the cross-network externalities effects, attract more users on the other side to the platform. It seems that price tilted to one side. In fact, it is a rational result when maximizing profits.Finally, based on the conclusions of pricing model and practical cases, I discusses the difference and connection between predatory pricing and pricing behavior of platform enterprise in the two-sided markets. I also discuss how to correctly handle the non-neutral price structure of platform enterprise in two-sided markets.Traditionally, a price below marginal cost is a main basis when judging the predatory pricing behavior. But in two-sided markets, we must fully consider the unique features of two-sided markets. In two-sided markets, the special pricing strategy is a common behavior out of rationality and it does not necessarily belong to predatory pricing. |
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