The Welfare Effect Of Exclusive Contracts In Asymmetric Platforms

At present,because of the differences in market segments,even if similar services are provided(such as take-out,online shopping and other scenarios),these competing platforms are often asymmetric.In order to compete for market share and gain higher profits,platforms have the motivation to launch exclusive contracts with Firms.There are two forms of exclusive contract:compulsory exclusion and indirect exclusion.In the former version,platforms force firms to settle in only one platform,in the second version,platforms charge different fees to single-homing firms and multi-homing firms.Although the Chinese policy sets strict limits to compulsory exclusion,still,it does not limit the platform to adopt differentiated charges for merchants,so the platform may take "indirect" actions to exclusion using price discrimination.By constructing an asymmetric two-sided market model,this paper analyzes the motivation and optimal pricing strategy for the platform to initiate different types of exclusion.There are two differentiated competitive platforms in the market,which are divided into advantage platform and disadvantage platform according to the differentiated services they provide.There are a large number of consumers and businesses in the market.The revenue of the platform depends on the number of firms on the platform and the fees that charged.The utility of consumers is affected by the differentiated services of the platform,the transportation cost and the number of firms on the platform.The utility of firms is affected by the charging level of the platform,the number of consumers on the platform and the transportation cost.In the benchmark case,the platform does not implement exclusion,and charges the same fees for firms.In the case of compulsory exclusion,the platform forces firms to single-homing and charges firms a single fee.In the case of indirect exclusion,the platform will charge different fees for multi-homing and single-homing firms to achieve the purpose of exclusion.Findings can be listed as below.(1)In the case of compulsory exclusion,with the increasing level of differentiation between platforms,the number of consumers and firms on advantage platform increases,and the charges for businesses increase;The number of consumers and firms on disadvantage platform will be reduced,but the firms’ charges will be reduced,and more firms will be attracted to settle in to cope with the competition.(2)In the case of indirect exclusion,with the increasing level of differentiation between platforms,the number of consumers and businesses on advantage platform increase,the charges for single-homing firms increase,and the charges for multihoming firms decrease.The number of consumers and firms on disadvantage platforms has decreased,the charges for single-homing firms decrease,and the charges for multihoming firms will increase.The charges of the two platforms for multi-homing firms may be greater than or less than that of single-homing firms:when the traffic costs of businesses are higher,the charges of the advantage platforms and the disadvantage platforms for single-homing firms are greater than those of the multi-homing firms;When the transportation cost of firms is low and the level of platform differentiation is high,advantage platform charges more for single-homing firms than for multi-homing firms;When the transportation cost of firms is low and the level of platform differentiation is low,the fees charged by disadvantage platforms for single-homing firms are higher than those charged by multi-homing firms.(3)There are differences in the motivation of asymmetric platforms to initiate exclusive actions.In the case of compulsory exclusion,the platform income is uncertain,which depends on the degree of differentiation between platforms,the transportation cost of firms and the transportation cost of consumers.When the firms’transportation cost is large or small,neither platform will launch compulsory exclusion.When the transportation cost of consumers is high and the firms’ transportation cost is low,or the transportation cost of consumers is low and the firms’ transportation cost is high,both platforms will launch compulsory exclusion.In other cases,according to the degree of platform differentiation,only one platform will initiate compulsory exclusion.Secondly,the motivation of the platform to initiate indirect exclusion will also be affected by the degree of differentiation between platforms,the transportation costs of merchants and consumers.When the transportation cost of merchants is high,neither platform will initiate indirect exclusion.When the transportation cost of consumers is low,both platforms will launch indirect exclusion.In other cases,advantage platforms will always initiate indirect exclusion,while weak platforms will only initiate exclusion when the degree of differentiation between platforms is small.(4)There are differences in the impact of the two exclusive trading modes on social welfare.When platforms launch compulsory exclusion,firm surplus,consumer surplus and social welfare will decrease.When the platform differentiation level is high.indirect exclusion will reduce consumer surplus and business surplus.When the platform differentiation level is low,indirect exclusion will increase consumer surplus and business surplus.The level of social welfare is additionally affected by the crossnetwork externality coefficient between consumers and firms.When the absolute value of the ratio of the two coefficients is large,indirect exclusion will reduce social welfare.When the absolute value of the ratio of the two coefficients is small,indirect exclusion will increase social welfare.