User Scale,Market Structure And Platform Pricing

Throughout the development of platform enterprises in the era of new Internet economy,they have generally experienced the stage of customer acquisition by "burning money" and the stage of profit with a large number of users.The existing classic literature studies the user pricing problem of bilateral platforms under the static analysis framework.However,the “burning money” behavior of platform enterprises and the dynamic changes of pricing at different stages still lack in-depth theoretical research.Therefore,constructing a two-stage model of "acquisition + profit" to analyze the dynamic pricing problem of platform enterprises.It proves that in the stage of customer acquisition,if the network externalities of scale growth of platform users under the complete monopoly or the network externalities of the relative scale growth of platform users under the oligopoly is larger,then the platform enterprises will have greater preferential power in this stage.Furthermore,this paper extends the exogenous two-stage model to the endogenous infinite stage model,and studies the market evolution of platform development and competition.It proves that under the condition of complete monopoly,with the increasing of network externalities coefficients of buyers and sellers,the market share of platform enterprises increases after infinite stage until they have the whole market.In the case of duopoly,if the network externalities coefficient of buyers and sellers is large enough or the network externality of initial users between platforms is large enough,the platform enterprises with larger initial users will have a "winner-takes-all" tendency.If buyer and seller users have a high enough level of quality preference,the two platforms will eventually share the market equally.In short,this paper explains the behavior of "burning money" and the phenomenon of "winner-takes-all" under the platform economy well.