| The highly competitive and rapid changing market for B2B E-commerce makes it much more important for B2B electronic intermediary to make its technical investment on the platform’s quality, because the quality of online platform plays a critical role in the users’ selections and loyalty.In the competitive market of B2B E-commerce platform, the earlier entrant has the advantage of switching cost while the later entrant has the advantage of declining IT cost. Considering the variable investment cost due to the improvement of platform quality, the paper develops an IT investment model to investigate the best investment strategy for B2B E-commerce platform under the impact of switching cost, declining IT cost, user price-sensitive coefficient and quality-sensitive coefficient. The results show that, switching costs helps earlier entrant increase investment in platform quality, assume an aggressive investment strategy. Declining IT cost helps later entrant increase investment in platform quality; assume an aggressive investment strategy only when user switching costs are lower.Focus on the typical network externality pattern in the service of B2B e-commerce platform provided by the B2B electronic intermediary, a simulation system based in Swarm is designed and developed to analyze the impact of network externality on the platforms’ investment decisions. Taking several simulation experiments with different simulation system parameters, we find the changing patterns of platform’s quality, price, market demand and profit under the effect of network externality. The experimental results of these simulations system show that the higher the intensity of network externalities, the market pioneers should aggressively improve the quality of its platform in order to get more market demand, and market later entrants should take a conservative investment decisions, reduce investment costs and prevent profits loss caused by the investment cost. |
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