TY - GEN
T1 - Study on Inter-temporal Pricing to Suppress Negative Network Externalities of Merchants in Two-Sided Markets
AU - Chen, Hao
AU - Xiong, Weiqing
AU - Xiong, Peichen
AU - Zhao, Jiaying
N1 - Funding Information:
*This work is supported by Student Research and Innovation Program (SRIP) of Ningbo University under Grant 2019SRIP0122.
Publisher Copyright:
© 2020 Technical Committee on Control Theory, Chinese Association of Automation.
PY - 2020/7
Y1 - 2020/7
N2 - The problem of dishonest transactions in two-sided markets is increasingly prominent, and its governance mechanism needs to be improved. Pricing strategy is an effective means of platform governance, which can restrain the negative network externalities caused by dishonest transactions. By using the inter-temporal analysis method, this paper analyzes the influence of network externalities in different periods on platform pricing and regulatory costs. The research shows that: from the perspective of platform profit maximization, (1) The greater the positive network externalities of merchants, the lower the platform charges merchants; (2) The greater the negative network externalities caused by dishonest transactions, the higher the platform charges merchants; (3) The greater the network externalities of consumers to merchants, the higher the platform charges merchants. Finally, the influence of cross network externality on platform pricing, platform supervision cost, number of both sides of the platform and platform profit is analyzed by simulation. This provides suggestions for the platform to control merchants' dishonest transaction behavior through pricing.
AB - The problem of dishonest transactions in two-sided markets is increasingly prominent, and its governance mechanism needs to be improved. Pricing strategy is an effective means of platform governance, which can restrain the negative network externalities caused by dishonest transactions. By using the inter-temporal analysis method, this paper analyzes the influence of network externalities in different periods on platform pricing and regulatory costs. The research shows that: from the perspective of platform profit maximization, (1) The greater the positive network externalities of merchants, the lower the platform charges merchants; (2) The greater the negative network externalities caused by dishonest transactions, the higher the platform charges merchants; (3) The greater the network externalities of consumers to merchants, the higher the platform charges merchants. Finally, the influence of cross network externality on platform pricing, platform supervision cost, number of both sides of the platform and platform profit is analyzed by simulation. This provides suggestions for the platform to control merchants' dishonest transaction behavior through pricing.
KW - Dishonest Transaction
KW - E-commerce
KW - Inter-temporal Pricing
KW - Network Externalities
KW - Two-Sided Markets
UR - http://www.scopus.com/inward/record.url?scp=85091394971&partnerID=8YFLogxK
U2 - 10.23919/CCC50068.2020.9188557
DO - 10.23919/CCC50068.2020.9188557
M3 - Conference Proceeding
AN - SCOPUS:85091394971
T3 - Chinese Control Conference, CCC
SP - 6668
EP - 6673
BT - Proceedings of the 39th Chinese Control Conference, CCC 2020
A2 - Fu, Jun
A2 - Sun, Jian
PB - IEEE Computer Society
T2 - 39th Chinese Control Conference, CCC 2020
Y2 - 27 July 2020 through 29 July 2020
ER -