Two-sided platforms performance investment and pricing

In the development of two-sided platforms, managers of platforms must decide what level of platform performance to invest. Higher performance is helpful to attract more users, but it often requires developers to make large investment to participate. Based on this, a model was established to explore platforms performance investment and pricing. The result shows that platforms performance investment and pricing are driven by two different expectations, favorable and unfavorable expectation. Under favorable expectation, managers only need to find the optimal performance and pricing according to investment profit function; under unfavorable expectation, managers can adopt seller subsidy strategy or buyer attraction strategy to eliminate the unfavorable expectations and maximize profits.