Stability, Bifurcation, and Chaos Control of Two-Sided Market Competition

Abstract

Benefitting from the popular uses of internet technologies, two-sided market has been playing an increasing prominent role in modern times. Users and developers can interact with each other through two-sided platforms. The two-sided market structure has been investigated profoundly. Through building a dynamics two-sided market model with bounded rational, stability conditions of the two-sided market competition system are presented. With the help of bifurcation diagram, Lyapunov exponent, and strange attractor, the stability of the two-sided market competition model is simulated. At last, we use the time-delayed feedback control (TDFC) method to control the chaos. Our main results are as follows: (1) when the adjustment speed of two-sided increases, the system becomes bifurcation, and chaos state happens finally. When the system is stable, the consumer fee is positive while developer fee is negative. (2) When the user externality increases, the stable area of the system increases, and the difference in user externality leads the whole system more stable. When the system is stable, the developer fee decreases. (3) The stable area becomes larger when developer externality increases; when the system is stable, the user fee becomes lower and developer fee becomes higher when developer externality increases. (4) The TDFC method is presented for controlling the chaos; we find that the system becomes more stable under the TDFC method.