Research On Pricing Strategy Of Mobile Value-added Service Platform Based On The Two-Sided Markets Theory

The development of the Internet and communication technology has tremendously influenced the operating mechanism of China telecom industry. Voice communication business has, to some extent, transferred to comprehensive network business in recent years. Mobile value-added services have grown more mature based on the Internet and development of communication technology. It can be foreseen that telecom operators in the future will aggressively innovate mobile value-added services besides developing basic voice communication business. Mobile value-added service platform has performed obvious characteristic of two-sided market. Users and service/content providers respectively provide and use mobile value-added service in two sides of the platform. Two-sided market theory mainly researches the economic behaviors of enterprise in the platform and two types of consumers in different sides and cross externality has played a vital role in the whole process of trading. Since the main profit resource of service and content providers is advertising fee in our country, this paper tries to study a mobile value-added platform involved three parties. Meanwhile, this paper also intends to analyze the pricing strategies of mobile value-added services of telecom operators based on two-sided market in industrial organizational theory and on cross network externality.This paper has discussed the two-sided characteristics of mobile value-added platform according to the features of this platform. Meanwhile, an overview of current situations and pricing patterns have been accomplished. The research technique in this paper is mainly mathematical model and game theory. There are two parts and the first part is about the pricing strategies of monopoly platform. This part has comprised actions of advertisers to build a model based on the method Armstrong had used in studying two-sided markets pricing problem, and has discussed in three different pricing modes to analyze the results according to the quality and cross-network externality. The second part is about pricing strategy in competitive platform and has discussed the results in three pricing modes as well. In the second part of this paper, numerical simulation has been used to make the solutions and to discuss the relationship between pricing strategy and cross-network externality and unit transportation cost in competitive platform. At the end of this paper, it reaches a corresponding conclusion and provides suggestions as well.