A Study On Product Differentiation And Platform Pricing In Two-sided Markets

At the beginning of the 21st century,after Roche&Tirole's(2003)pioneering research,two-sided market theory has become a hot research direction in the field of industrial organization.As the traditional industrial organization problems,pricing is still the core of the theory of the two-sided market.At present,the domestic and foreign related literature on pricing in two-sided markets has done considerable research,the topic of this paper is the effect of product differentiation on the platform pricing.Firstly doing literature review about the two-sided market pricing and product differentiation,then summarizes the shortcomings of previous studies.Combined with the problems in the realistic economic life,defines the influence of product difference to the platform pricing as the theme.Then it describes the concept of two-sided market and product differentiation.Secondly in the theory of two-sided markets,the impact of different user ownership structure and pricing methods on the pricing of the platform is very large.In this paper,the degree of product differentiation is assumed to be uniformly distributed on the linear range of size.1,and the platform enterprise can provide the products with different degree of difference in the range.Then the pricing model is established to analyze the influence of the pricing model on the platform.This paper focuses on the analysis of the platform product or service differentiation degree of symmetry that can be used with a parametric representation of the differentiation.1.User-homing.From the perspective of the homing to choose a single-homing of consumers and manufacturers,consumers and manufacturers belonging to multi-homing to establish pricing model.2.Pricing methods.From two aspects of the monopoly platform and competitive platform,the paper analyzes the impact of platform enterprise product differentiation on the platform take registration fees,transaction fees and two step charging.In this part,analyses the situation of the platform on both sides take the same pricing mode.The main conclusions of this paper are as follows:1.In two-sided market,the platform to improve the degree of product differentiation can not only increase the price,increase profits but also increase market share.In the competitive platform,to provide same degree of product differentiation,the profits of single-homing is more than the multi-homing.2.The role of differentiation on the pricing of the platform,in the structure of the single-homing is independent of the user network externalities;In the structure of multi-homing,platform for consumer pricing is only related to the difference,but the manufacturers pricing is also under the influence of network externality.3.Consider using a symmetric pricing in competition platform,when product differentiation is the same,for the enterprise platform,the registration fee is the best,the transaction fee is better than the two step charging.4.Provide symmetry product differentiation degree in the platform,considering user homing,platform's price and profit is equal to a fixed value;But when considering pricing methods,improve the degree of product differentiation can increase profits.Related suggestions are put forward in this paper:1.The difference of the product or service is the inevitable trend of the development of the industry,which is low in the threshold.A single product or service more difficult to support the development of a business,providing differentiated services to increase revenue is the first choice for enterprise development.2.According to the difference of the product or service to improve customer loyalty and take the registration fee.In the homogenization competition market,single-homing structure can obtain higher profits.Because of the competition,to take the same pricing strategy on both sides of the user,the registration fee is better than the other charges.3.For new industries,in order to avoid the incumbent enterprise platform competition,through differentiation to acquire the market,such as industry,region,personalization,regional + high-end or professional and high-end.4.Rely on differentiated services to build brands,enhance core competitiveness.In the product,technology homogenization serious reality,the service has become a key factor in the success of a business.Differentiated services can help enterprises to meet customer needs and analysis of customer behavior and market trends,so as to establish a brand between the user.Finally,although this paper analysis the role of differential product in the bilateral market in theory,but model analysis is insufficient,the future research will refinement of the model and add case studies and empirical studies.