ISSN 0253-2778

CN 34-1054/N

Open AccessOpen Access JUSTC Research Articles:Management Science and Engineering

The price strategy of information asymmetry platform with partly multi-homing

Cite this:
https://doi.org/10.3969/j.issn.0253-2778.2017.11.010
  • Publish Date: 30 November 2017
  • In real life, it is a rare occurrence that all customers are multi-homing or single-homing to platforms. The more prevalent case is that a part of the customers are multi-homing to platforms, while others are single-homing. Based on the Hotelling model, a two-sided platform competition model with asymmetric information was built. A research of the platform price strategies with different market structures under customer partly multi-homing was conducted. The research show: ①platforms charge a low price to customers who join in first and the price is closely related to the customers’ affiliated situation; ②platforms will set a low price for those who arrive later if they are multi-homing to platforms and it is more beneficial for those who join in first if they single-home when the network effect is high enough;③it is important for the development of the platform to set appropriate price strategies for guiding customers’ affiliation under various market structures.
    In real life, it is a rare occurrence that all customers are multi-homing or single-homing to platforms. The more prevalent case is that a part of the customers are multi-homing to platforms, while others are single-homing. Based on the Hotelling model, a two-sided platform competition model with asymmetric information was built. A research of the platform price strategies with different market structures under customer partly multi-homing was conducted. The research show: ①platforms charge a low price to customers who join in first and the price is closely related to the customers’ affiliated situation; ②platforms will set a low price for those who arrive later if they are multi-homing to platforms and it is more beneficial for those who join in first if they single-home when the network effect is high enough;③it is important for the development of the platform to set appropriate price strategies for guiding customers’ affiliation under various market structures.
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