Research on the Pricing Strategy of “Internet +” Recycling Platforms in a Two-Sided Network Environment

Xiaodong Zhu,Wei Li

doi:10.3390/su12031001

Abstract

“Internet +” platform recycling is an emerging business model with two-sided market characteristics. How to meet the needs of consumers and manufacturers and how to formulate a reasonable two-sided pricing structure have become challenges faced by recycling trading platforms. Based on the theory of a two-sided market, the pricing mechanism of a monopoly platform and a model of competing platforms are studied. Consequently, a sensitivity analysis and comparison analysis are conducted, giving a pricing decision and the optimal profit of closed-loop supply chain systems. Finally, through a numerical simulation analysis, the impacts of the inter-group network externalities, service differentiation, and the matching efficiency on e-waste recycling prices and profits are obtained. The result indicates that the influences of inter-group network externalities on monopoly platforms and competing platforms are different; thus, platforms should choose pricing strategies according to their own market position. The pricing of the two types of platform is inversely proportional to the time-sensitive coefficient of the two platforms, while it is directly proportional to the matching efficiency. The improvement of the differentiation of service will increase the pricing of the platform for single-homing manufacturers without affecting the multi-homing consumers, and profits will increase accordingly.

Highlights

With the rapid development of science and technology and the wide application of electronic products, electronic waste ushered in large-scale “decommissioning,” followed by the recycling of such waste
This paper uses two-sided market theory to analyze the pricing problem of electronics recycling platforms; in addition, the problem of two-sided markets is introduced to a closed-loop supply chain model, and the actual problem is abstracted to theory research
The literature review in this paper mainly focuses on the theoretical research on two-sided markets, closed-loop supply chain pricing and electronic waste recycling

Summary

Introduction

With the rapid development of science and technology and the wide application of electronic products, electronic waste ushered in large-scale “decommissioning,” followed by the recycling of such waste. Dafeng recycling, which upgrades and innovates its pricing strategy and provides subsidies to users, gives registered users 15–60 RMB of economic value in recycling subsidies each time they use the platform This strategy has attracted a large number of new users and increased customer loyalty. This paper uses two-sided market theory to analyze the pricing problem of electronics recycling platforms; in addition, the problem of two-sided markets is introduced to a closed-loop supply chain model, and the actual problem is abstracted to theory research.

Literature Review

Problem Description

Pricing of Competing Platforms

Findings

Inter‐Group Network Externalities