Platforms Competition: An Ecosystem-View Analysis Based on Evolutionary Game Theory

Abstract

The competition between platforms supported by digital technology, to a great extent, affects the structure of the whole industry and the fate of individual enterprises in the industry. For related enterprises, it is very important to clarify the influencing factors of platform competition equilibrium. This paper constructs a game model that includes platforms, suppliers, and the final consumers. We analyze the condition and stability of each equilibrium and the impacts of the characteristics of the core and complementary products on the equilibrium by using the method of evolutionary game. Our results show the following: (1) If the two platforms initially have separate advantages in terms of the number of suppliers or consumers, there will be an equilibrium of the coexistence of the two platforms; otherwise, there will be an equilibrium of single platform dominating. (2) The equilibrium of a single platform dominating is more stable than that of the coexistence of multiple platforms. (3) The equilibrium of coexistence is more easily broken by the occasional shock of increasing or decreasing the number of suppliers than by consumers. (4) Platforms with poor core product quality and a high price for core and complementary products can coexist with other superior platforms only if the former has more consumers and suppliers at the beginning of the competition. This paper not only enriches the research content in the field of platform competition, but also provides new ideas for them to develop appropriate competition strategies in combination with their own conditions.