Investment Strategies For Platform Competition With Digital Empowerment Service

Accelerating digital development and building digital China has become an important issue in the context of China’s digital economy era.In the context of China’s ‘digital intelligence innovation’,more and more enterprises have begun to attach great importance to digital transformation,and the implementation of digital empowerment strategies has become an important consideration for competitive platforms in the era of digital economy.Based on the game-theoretic model of differentiated E-commerce platform competition,this paper considers two user attributions.Whether different platforms adopt digital empowerment service and the impact of different levels of such service on bilateral user utility and the revenue of platform,we analyze the strategies of platform enterprises under two different investment levels,high value-added service investment and low value-added service investment.Meantime,we analyze three different platform competition decisions and their corresponding equilibrium strategies under two attribution situations(single-homing for both buyers and sellers,single-homing for buyers and partial multi-homing for sellers).This paper finds that when the platform adopts the same investment level of digital empowerment service strategy,the service fee charged by the platform to the bilateral users is related to the cross-side network effects of opposite users,the investment level,and the platform difference.When the platform adopts the digital empowerment service strategy with different investment levels,no matter whether the two-sided users are single-homing or multi-homing,to make full use of the enabling investment,the platform needs to comprehensively consider the cross-side network effects,and the investment levels and the platform differentiation when charging service fees from the bilateral users,and it is also influenced by the investment strategy adopted by the competitive platform.