Choice And Equilibrium Analysis Of Different Merger Strategies In Bilateral Markets

In the past 40 years since reform and opening up,with the rapid popularization of Internet penetration in China and the further promotion of the concept of "Internet +",more and more industries have shown the economic characteristics of the bilateral market.The emergence and development of Internet platform-based enterprises not only inject fresh blood into the traditional market economy,but also play an increasingly important role in China's economic transformation,at the same time,they also intensify the competition between markets.The competition between Internet platforms has gradually shifted from large-scale price subsidies to mergers between platforms.For example,the mergers and acquisitions of Dianping and Meituan,Youku and Tudou,Ctrip and Qunar,etc.This paper analyses and discusses the changes of equilibrium pricing,demand scale and profitability of Internet platform enterprises before and after implementing different merger strategies.Firstly,in the way of literature review,this paper introduces in detail the main research results of domestic and foreign scholars on the definition of bilateral markets,pricing behavior and horizontal and vertical mergers.Secondly,from a theoretical point of view,this paper summarizes the structure,main types,economic characteristics of bilateral markets and the main factors affecting pricing.Finally,by constructing a theoretical game model,assuming that users on both sides of the platform are single-ownership,the market equilibrium changes of bilateral platform enterprises under three strategies of non-merger,horizontal merger and acquisition,vertical integration are analyzed by setting up a demand function and a profit function.In addition,this paper examines the impact of cross-network externalities between participants on pricing behavior,demand quantity and profitability under different merger structures.The results show that horizontal mergers will lead to higher pricing level for suppliers of complementary products;platform enterprises will reduce the registration fees charged to consumers;when network externalities are strong,horizontal mergers can make platform enterprises gain higher profits than non-mergers.Vertical integration will lead to lower pricing level of complementary suppliers;when cross-network externalities are strong,the platform will reduce the registration fees charged to consumers,and the profit level of platform enterprises will increase.Therefore,there is an incentive to implement vertical integration strategy.The profitability of platform enterprises after vertical integration is higher than that of joint profits under horizontal mergers and acquisitions.When crossnetwork externalities are strong,the registration fee for buyer participants in horizontal mergers and acquisitions is higher than that in vertical mergers and acquisitions.When crossnetwork externalities are weak,the registration fee charged by platform enterprises to consumers through vertical mergers and acquisitions is the highest,while the fee charged by horizontal mergers and acquisitions is the lowest.