Platform Subsidy with Endogenous Network Effects

Lin, Mei; Wu, Ruhai; Zhou, Wen

doi:10.2139/ssrn.2426033

Cited by 10 publications

(12 citation statements)

References 20 publications

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“…To maintain the tractability of a model with general sub-market competition (C), the assumption of exogenously fixed n is made. One paper that considers n depending on P 2 is [14] but they must specify a very specific seller competition structure and this prevents a general analysis of platform outcomes across seller competition structures. 9 This implies that for any competition structure within sub-markets, when the number of sellers increases within a sub-market then consumer surplus for each consumer increases and each seller's profit decreases.…”

Section: ∂Cs(nc) ∂Nmentioning

confidence: 99%

Vertical Relationships within Platform Marketplaces

Tremblay

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: In two-sided markets a platform allows consumers and sellers to interact by creating sub-markets within the platform marketplace. For example, Amazon has sub-markets for all of the different product categories available on its site, and smartphones have sub-markets for different types of applications (gaming apps, weather apps, map apps, ridesharing apps, etc.). The network benefits between consumers and sellers depend on the mode of competition within the sub-markets: more competition between sellers lowers product prices, increases the surplus consumers receive from a sub-market, and makes platform membership more desirable for consumers. However, more competition also lowers profits for a seller which makes platform membership less desirable for a seller and reduces seller entry and the number of sub-markets available on the platform marketplace. This dynamic between seller competition within a sub-market and agents' network benefits leads to platform pricing strategies, participation decisions by consumers and sellers, and welfare results that depend on the mode of competition. Thus, the sub-market structure is important when investigating platform marketplaces. Terms of use: Documents in

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Section: ∂Cs(nc) ∂Nmentioning

confidence: 99%

Vertical Relationships within Platform Marketplaces

Tremblay

2015

SSRN Journal

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“…However, existing studies have also identified a potential channel of positive externalities (e.g., [2], [3], [7], [10], [15], and [16]). Crowdfunding platforms are two-sided markets, in which agents from one side of the market benefit from increased interactions with agents from the other side of the market, creating positive cross-group externality ( [3] and [15]) that potentially increases the size of the market.…”

Section: Introductionmentioning

confidence: 99%

Externalities in Charitable Crowdfunding

Sulaeman¹

2019

Proceedings of the Annual Hawaii International Conference on System Sciences

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This study examines how the existence of multiple charitable campaigns supporting similar causes on the same platform influence the donations received by each campaign. The existence of multiple campaigns supporting similar causes can have negative externalities as they compete for donors. However, the existence of additional campaigns can also result in positive externalities as potential donors benefit from a larger variety of projects to choose from. This study observes negative and positive externalities from the existence of multiple campaigns supporting similar causes. An increase in the number of campaigns leads to a decrease in the average donation received by each campaign, indicating that the additional campaigns do not necessarily expand the market. However, when some of the campaigns perform exceptionally well, other campaigns-including non-top performing campaigns-receive more donation, highlighting the market expansion effect of the presence of successful campaigns on a platform.

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“…Therefore, product has network effects not only if there are individual benefits related to the product, but also additional benefits if other consumers having the same or compatible product (Afuah, 2013). The technology compatibility within different devices can also be translated into external network effects that lead to positive externalities between users (Cusumano, 2010;Lin et al, 2014). The retention of existing consumers can be related to the degree of control the platform providers are exercising over their platforms (Park, 2014).…”

Section: Discussion Implications and Conclusionmentioning

confidence: 99%

Multi Sided Platforms (MSPs) Value Captation and Monetization Strategies: A Strategic Management Perspective

Sabourin¹

2016

BMS

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The fundamental basis of all multisided business platforms is the value proposition offered to consumers, on one hand, and to business buyers, on the other hand, and so our starting point must be with the fundamentals concerning the management of value propositions. The competitive strategies of monetization and value creation include: Envelopment, overlapping, freemium, advertising and asymmetry information methods. In this paper, we allude that multisided platforms to play the role of resource integrators, involving consumers and business partners in a process of co-creation of value-an integrated, a networked business model. This is primarily due to a shift in the relative influence of different business stakeholders in the context of the business modeling of two-sided multisided platforms.

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Platform Subsidy with Endogenous Network Effects

Cited by 10 publications

References 20 publications

Vertical Relationships within Platform Marketplaces

Vertical Relationships within Platform Marketplaces

Externalities in Charitable Crowdfunding

Multi Sided Platforms (MSPs) Value Captation and Monetization Strategies: A Strategic Management Perspective

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