Research On Pricing And Operational Strategies Of Two-Sided Platforms Under Information Asymmetry

In recent years,the platform economy is booming and the platform mode is rapidly promoted.The great success of Internet platform enterprises represented by Amazon,Google and Facebook in Europe and America,as well as,Alibaba and Tencent in China,has attracted continuous attentions of many scholars and industrial practitioners.Fruitful researches on platform pricing and platform competition strategies,etc.,have been done.However,until now,there has been seldom articles that take information asymmetry into account and few researches on the internal operation mechanism of the platform enterprises.The investigation on platform pricing in case of information asymmetry between platform participants and the design of incentive contract for platforms will not only be useful to raise platform profits but also enrich the theory of two-sided markets,which is of great theoretical and practical significance.For this end,this paper conducts an in-depth research on platform pricing in cases that there are information asymmetry between platforms and users,between agents on two sides and between competing platforms,as well as,incentive contract design in case that there exists information asymmetry between platform owners and managers.Firstly,how monopoly platform engages in screening consumers by providing two versions of products is studied in case that consumers' willingness to pay is either high or low and it is their private information.The findings show that,compared with the low type consumers,the platform is apt to set a higher price and higher quality level but lower amount of advertising(even zero advertising)for the high type consumers,and charges a higher advertising rate for advertisers who touch high type consumers.Prices set for both types of consumers can be negative when the nuisance cost of advertising is low,but the price sets for the high type consumers is strictly positive when the nuisance cost of advertising is high.Compared to the case of complete information,the prices charged by the platform for two types of consumers may be distorted upwards or downwards,but the amount of advertising for high type consumers is always distorted downwards and the amount of advertising for low type consumers is always distorted upwards.Secondly,the optimal pricing of two-sided platforms are studied in case that the consumers are information asymmetric about the sellers' prices and the sellers are differentiated in the aspect of prominence.The results show that,for monopoly platform,information asymmetry leads to a lower price for the non-prominent sellers,as well as,the higher proportion of the prominent sellers or the weaker the intensity of indirect network externalities of the non-prominent sellers is,the more unprofitable is;For duopoly platforms,information asymmetry leads to higher price for consumers and the prominent sellers,and increases the profits of platforms.The monopoly platform has incentive to disclose the pricing information of agents in some cases,whereas the duopoly platforms are inclined to keep consumers opaque about the information of seller's price.Thirdly,the optimal pricing of the incumbent platform and the entrant platform for consumers is investigated in case that the entrant is information asymmetric about consumer's transport cost.The result shows that,when consumers are single-homing,the price set by the entrant platform is between the prices set by the incumbent platform when the consumer's transport cost is high and low.Compared with the results in case of complete information,information asymmetry leads to higher profits for both platforms when the transport cost is high,and higher profit for the incumbent platform when the transport cost is low.As well as,the entrant platform with information disadvantage may earn more than the incumbent platform.When consumers are multi-homing,the optimal prices and profits of both platforms depend on the real value of the transport cost.Fourthly,the optimal design of incentive contract and the influence of the observability of incentive contracts on platforms competition are investigated in case that the owners of the duopoly platforms employ managers to reduce marginal production cost of the platforms.The result shows that,each platform owner compensates the manager with a linear contract,composed of fixed salary and piece-rate wage.Compared to the results under unobservability,observability of the incentive contract leads to higher piece rates,equilibrium quantities,consumer surplus and social welfare,but lowers equilibrium prices and platform profits.The increase of indirect network externalities raises the piece rate and the equilibrium quantities,but lowers the equilibrium prices.However,the impact of indirect network externalities on platform profits depends on the synthetic effect of several factors.At last,the design of managerial delegation incentive contract and the impact of managerial delegation on market equilibrium are studied,in case that duopoly platform owners delegate the quantities of markets on two sides of the platforms to the managers.The results show that,managerial delegation lowers the equilibrium prices and platform profits,but raise the equilibrium quantities and consumer surplus.The analysis of the employment decision-making of platform owners shows that,both platform owners choose to hire managers if the hiring cost is low and not to hire if the hiring cost is high,when the intensity of the indirect network externalities are weak,only one platform chooses to hire a manager if hiring cost is intermediary when the intensity of the indirect network externalities are strong.