The Impact Of Horizontal Merger Of Platforms On Pricing

With the rapid of development of internet platforms,the cases of platform horizontal mergers occur frequently.However,whether horizontal merger among platforms will cause the rise of market price,is the focus of regulatory authorities.In addition,how to set the optimal price for bilateral users after the horizontal merger of the platform is not only the key for the platform to use the horizontal merger strategy to promote its own development,but also the key for the platform to find a long-term stable profit.Although enterprises horizontal merger as the important content of the theory of industrial organization has been paid close attention by academic field,but the platform as a new form of industrial organization,its common characteristics is difference from traditional enterprise.So the problem that hoe to develop the optimal price after the horizontal merger can't find the answer from the traditional merger theory.This paper aims to provide a reference for the healthy development of the platform and the regulatory authorities by studying the impact of horizontal merger on pricing.This paper firstly gives a comprehensive overview of the research status of traditional horizontal merger,the research methods of horizontal merger of platform,and the influencing factors of platform price.Secondly,on the basis of Salop model,a price game model suitable for the analysis platform is constructed and factors affecting the platform price are introduced.Then,based on the synergistic effect of horizontal merger,this paper subdivides the market environment into two types:complete information and incomplete information.In the market type of complete information,the equilibrium price after horizontal merger of the platform is solved by using the static price game analysis of complete information.In the market type with incomplete information,the equilibrium price of the platform after horizontal merger is solved by using static price game with incomplete information and sequential price game.Finally,the price changes and influencing factors before and after the horizontal merger of the platform were compared and analyzed,and the numerical simulation was carried out.Meanwhile,case analysis was carried out based on the merger event between 58.com and Gan Ji.com.The paper concludes that,in the market environment of complete information,even if the synergistic effect is not taken into account,the horizontal merger behavior of the platform under the effect of network externality will not necessarily lead to the increase of equilibrium price.After horizontal merger,the platform should lock in business users by attracting more consumers,so the platform should fiurther reduce the price of consumers on one side.The welfare and social welfare of users on both sides of the platform will increase with the increase of network externalities,therefore,it is suggested that when supervising the horizontal merger of platforms,the regulatory authorities should take into account the impact of price changes and network externalities on welfare.In the market environment with incomplete information,if the horizontal merger of platforms can produce greater synergies,the pricing after the horizontal merger of platforms will increase due to the lack of market information,thus damaging the consumer surplus.For this reason,it is suggested that the regulatory authorities should increase market transparency to avoid unnecessary loss of welfare caused by lack of information.