Modeling And Simulation Of Investment For B2B Platform Under Network Externality Considering User Behavior

B2B e-intermediary is a type of third party service supplier who provides trade service for enterprises on the internet.They have become the most dynamic and fast-growing market entities in e-commerce market.The rapid development of information technology intensifies competition between B2B platforms.New information technologies are springing up and spread out quickly,which bring huge investment pressure and serious homogeneous competition.As a result,soaring revenue but continues loss expansion are presented in this industry.IT investment is a significant method to improve technology and service qualities of B2B platform,which can help attract and maintain users.Scientific investment strategy plays an important role in enterprises' IT investment decisions and makes a great difference to the long-time profit and competitive advantage of enterprises.B2B platforms'services have typical characteristics of network externality.In recent years,network externality has joined attention from e-commerce firms as well as researchers in this field.However,most of the existed studies focus on enterprises and ignore behavior of users on platforms.In fact,users in two-side platform show diversified behavior features.Therefore,discuss the optimal IT investment strategy under network externality considering user behavior by theoretic modeling method is of certain theoretical and practical value.The object of this study is B2B e-commerce platform(B2B platform for short),of which the typical characteristic is network externality.Users on two sides-buyer and seller-of a platform are the sources of the platform's profit,and the user base is the foundation for a B2B platform to survive and grow.The study of this paper contains three main parts.The first part is the study of theoretical foundation in the method of literature review.The second part is the modeling analysis of B2B platform investment strategy based on theoretical study.The third part is simulation study of B2B platform IT investment strategy under network externality using Netlogo simulation software.Experimental results of theoretical modeling and simulation show that there exist two kinds of equilibrium strategies,simultaneous equilibrium and sequential equilibrium depending on whether the network externality is high or low relative to the extent of decline in IT cost.In the simultaneous investment game model,the quality of duopoly platform decrease to minimize due to competition.The two platforms share the same amount of market price and revenues.The optimal price is related to the psychological cost of perceptive quality preference difference of platform and network externality.In sequential investment game model,the late entrant into the market has two kinds of compatibility strategy choice,completely compatible and completely incompatible respectively.Anticipating the late entrant's investment strategy,the early entrant would choose the optimal switching cost to maintain its first-mover advantage.However,when the late entrant succeeds in conducting completely compatible strategy,the competitive advantage of the late entrant cannot be changed and the early entrant is thrown into passivity.