Research On The Entry And Evolution Mechanism Of China’s Two-sided Market

Two-sided market is a widespread market form in the economy,which is usually served by one or several competing platforms for two different customer groups to operate and interact with each other.The evolution of two-sided market in China is closely related to the digital transformation strategy,and is also consistent with the update and iteration of digital technology.As productivity enters the fourth industrial revolution centered on digital technology,platform enterprises have also evolved from offline physical matchmaking media to online information sharing intermediaries,exchanging information and trading commodities through traffic and data services.At the same time,in the current transition period of Internet "demographic dividend"from the incremental period of rapid growth to the stock period of stable development,the two-sided market form is also transforming from consumer Internet to industrial Internet.The theory of industrial organization holds that market pioneers can gain a higher dominant position and prevent new enterprises from competing for market shares by building entry barriers.In this context,it is of great significance to clarify the characteristics of two-sided market,the market entry of platform enterprises and the evolution of market structure.Based on the two-sided market theory,the existing theoretical research systematically discusses the market entry of platform enterprises and the evolution of two-sided market structure from the aspects of mechanism,method,timing and strategy.Empirical studies mostly starts from the new empirical industrial organization theory to derive the game equilibrium results after long-term competition of enterprises,or interprets the development law of a specific industry according to the characteristics of the two-sided market.It does not start from the actual development of China’s economic system to sort out the problems involved in the two-sided market and provide solutions.Therefore,based on the development practice of China’s two-sided,this dissertation firstly combs the evolution process and summarizes the evolution path of China’s two-sided market.Secondly,in view of the fact that the entry mechanism of different two-sided markets depends on the heterogeneity of two-sided market users.Based on the market entry theory of industrial organizations,this dissertation takes the industrial Internet as an example to construct a static discrete game model to explore the entry decision-making mechanism of platform enterprises in two-sided markets.Then,the analysis is further refined to micro subjects,starting from the interaction behavior of end users on both sides of the platform,and using ABM model as a tool to study the evolution of market structure and its influence mechanism in the two-sided market.Finally,by simulating the impact path of demand-side and supply-side shocks on the evolution of market structure,this dissertation evaluates the regulation policies of two-sided market.The research of this dissertation has found that:Firstly,China’s two-sided market has experienced the evolution process from scratch to existence,from small to large,and from "traditional two-sided market-new two-sided market based on network technology-two-sided market in the era of digital economy".It is manifested as the platform form from physical trading venues to virtual network spaces.The nature of the platform has evolved from simple enterprise attributes to the "dual attribute" of enterprises and markets.The form of traded goods has expanded from physical products and services to digital solutions that sliced the production process.And its economic attributes have transformed from completely exclusive goods to shared goods with the separation of use right and ownership.The service objects of the platform are horizontally expanded from individual consumers on the demand side to heterogeneous consumers,and then extended to the supply side of the whole service industry chain.Matching technology has shifted from a simple matching mechanism to accurate matching based on artificial intelligence digital algorithm.Second,in the industrial Internet two-sided market represented by the Industrial Internet,the construction of industrial Internet platform by enterprises is not only the result of the individual economic choice,but also the game equilibrium of the joint decisionmaking of enterprises in the industry.The network externalities of two-sided market can help enterprises to digitalize,but the market entry barriers show significant ownership bias.Third,the evolution and formation of two-sided market structure is the result of the dynamic interaction between two-sided users’ platform entry and platform selection decision-making behavior.It is jointly affected by multiple factors such as platform quality differences,enterprise entry costs and operating costs,cross network externalities,and users’ bounded rationality.However,under the influence of enterprises’ strong demand for cost reduction,there is a phenomenon of "bad money driving out good money" in the competition between platforms.Fourthly,different from the regulation of unilateral market,the regulation and effect of two-sided market should fully consider the behavioral changes of micro subjects under the characteristics of two-sided market of the industry.Taking the two-sided market of consumer Internet as an example,the policy of improving network security on the demand side and the policy of industrial chain coordination on the supply side both enhance the market competition to varying degrees.However,the effects of policics on improving market efficiency and enhancing social welfare are different.