Bilateral Market Research Articles

Research on Market Definition of Digital Economy and Case Analysis: Based on the Perspective of Bilateral Market

In recent years, with the continuous development of digital economy, regulating the healthy development of platform economy has become an important issue. China's relevant government departments call for a clear adherence to the principles of “fair competition”, and for the strengthening of anti-monopoly and the establishment and improvement of market supervision to adapt to the development of the digital economy. In the process of anti-monopoly law enforcement, the relevant market definition is usually regarded as the logical starting point of analyzing the competitive behavior. Compared with traditional enterprises, platform enterprises have bilateral market characteristics such as “cross network externality” and “asymmetric price structure”, which face challenges in defining their relevant markets. This article first clear the bilateral market meaning, then discusses the platform enterprise bilateral market characteristics, and sort out the scholars in recent years about “define a single or multiple market” “assumed monopolist test is applicable”point of view, finally analyzed the “Sherpa's Abused Market Dominance” “Tangshan Renren Company v.Baidu Case” “Qihoo360 v.Tencent Case” three Chinese anti-monopoly law enforcement cases. The aim is to further discuss how to better combine the theoretical investigation and case analysis of qualitative and quantitative analysis to define the relevant market more accurately.

Targeted Advertising Placement in Video Platforms: Implications for Business Profitability

Advertising is an important tool used to deliver commercial messages with a strong economic purpose. With the development of online information, more and more companies or advertisers choose to advertise on large video platforms. However, the ambiguity of advertising positioning has led to a low tolerance of the audience population to the advertisements placed on video platforms. "Targeted advertising" and "precision marketing" have always been commercial buzzwords, and targeted advertising is one of the marketing strategies of precision marketing. In this paper, we explore the attitudes and preferences of different groups of people in terms of ad appearance, ad type and ad content, as well as the differences and connections between public service ads and commercial ads, using a large video platform in mainland China as a background. Among them, it is found that for the group of company employees, they prefer food-based ads, which is quite different from what is expected. For companies, placing more precisely targeted ads is conducive to positive communication in the bilateral market.

Fee or subsidy? Pricing strategies for digital content platforms with different content and advertising

AbstractThe practice of offering basic and premium services with different content and advertising on digital content platforms has gained popularity. The challenge of balancing subscription fees and advertising fees to maximize revenue has led some platforms to charge consumers for the basic service, while others subsidize it. Therefore, this study aims to examine whether consumers should be charged or subsidized for the basic service, which includes lower‐quality content and advertisements. By utilizing an optimization model, we discover that when there is a significant surplus of advertising or a slight surplus of advertising with a minimal profit to advertisers, the platform should charge. However, when the surplus of advertising is low and the profit to advertisers is high, the platform should subsidize. Furthermore, under partial market coverage, when the surplus of advertising is low and the profit to advertisers is moderate, the platform should initially charge and then subsidize as the content quality difference increases. Surprisingly, the intuition that the pricing of the basic service and advertising should decrease with the nuisance of advertising and increase with the surplus of advertising may not always hold true. This study led to a novel approach to exploring differentiated pricing for digital content platforms, taking into account the advertising information value from a bilateral market perspective.

Research on Time to Market and Pricing of Platform Products in a Competitive Environment

Platforms are gradually becoming important business organization models, and platforms with bilateral market characteristics such as payment platforms and online shopping platforms are gradually penetrating people’s lives. Freemium content mostly exists in particular platforms such as online video platforms, etc. Platforms need to balance upstream and downstream markets when formulating strategies. This paper is the first to explore the time-to-market and pricing strategies of products in bilateral markets. By connecting upstream and downstream markets through cross-network externalities, we construct a system dynamics model of the problem, simulate the diffusion process of new product launches, and solve the problem of the optimal time to market and optimal pricing of the product. The simulation analyzes the effects of different parameters on the optimal time-to-market and pricing strategies, and comparing the diffusion in a unilateral market, we find that in a competitive market environment, the time-to-market and pricing of products are influenced by exogenous variables such as network externalities, and firms can promote their products more efficiently by changing the marketing mix strategy of platform product benefits and quality reputation. Meanwhile, the results obtained by considering bilateral markets when developing strategies for platform-based companies can lead to higher returns.

Marketplace: Business management in a bilateral market

Aim. The presented study aims to develop recommendations aimed at optimizing the entrepreneurial activity of a marketplace.Tasks. The author briefly describes the functioning of a marketplace; justifies the classification of the marketplace as a two-way platform; identifies and formalizes platform management tools; determines approaches to pricing; substantiates the need to choose different strategies depending on the stage of the marketplace lifecycle.Methods. Based on the performed analysis, the author uses Tirol and Roche's basic model of bilateral platforms, the concepts of subsidized pricing and price discrimination in combination with the basic methodological approaches of entrepreneurship theory.Results. Additions are made to the definition of the concept of marketplace, and the viability of considering it as a bilateral platform is substantiated. The study highlights and formalizes business management tools in the bilateral market, identifies the most effective approaches to pricing and substantiates the need to apply different strategies at different stages of the marketplace lifecycle. The author develops recommendations aimed at optimizing the entrepreneurial activity of the marketplace.Conclusions. Marketplace is actually a bilateral platform. At different stages of its lifecycle, different strategies are needed to optimize different indicators. It seems appropriate to use a subsidized pricing model.

Presenting an economic interaction bi-level model between electricity retailer and customer in bilateral electricity market contract

Presenting an economic interaction bi-level model between electricity retailer and customer in bilateral electricity market contract

A Fuzzy Prescriptive Analytics Approach to Power Generation Capacity Planning

This study examines the long-term energy capacity investment problem of a power generation company (GenCo), considering the drought threat posed by climate change in hydropower resources in Turkey. The mid-term planning decisions such as maintenance and refurbishment scheduling of power plants are also considered in the studied investment planning problem. In the modeled electricity market, it is assumed that GenCos conduct business in uncertain market conditions with both bilateral contracts (BIC) and day-ahead market (DAM) transactions. The problem is modeled as a fuzzy mixed-integer linear programming model with a fuzzy objective and fuzzy constraints to handle the imprecisions regarding both the electricity market (e.g., prices) and environmental factors (e.g., hydroelectric output due to drought). Bellman and Zadeh’s max-min criteria are used to transform the fuzzy capacity investment model into a model with a crisp objective and constraints. The applicability of methodology is illustrated by a case study on the Turkish electric market in which GenCo tries to find the optimal power generation investment portfolio that contains five various generation technologies alternatives, namely, hydropower, wind, conventional and advanced combined-cycle natural gas, and steam (lignite) turbines. The results show that wind turbines with low marginal costs and steam turbines with high energy conversion efficiency are preferable, compared with hydroelectric power plant investments when the fuzziness in hydroelectric output exists (i.e., the expectation of increasing drought conditions as a result of climate change). Furthermore, the results indicate that the gas turbine investments were found to be the least preferable due to high gas prices in all scenarios.

Data envelopment analysis and stochastic equilibrium analysis for market power investigation in a bi-level market

This study investigates how the exercise of market power affects the economic efficiency and revenue sharing in a bi-level market, which integrates upstream contract market and downstream wholesale market. We consider price volatility and identify Nash equilibrium restricted by the data envelopment analysis (DEA)-estimated capacity constraint. This study develops stochastic mixed complementarity problems (MiCP) models embedded with stochastic programming (SP) and robust optimization (RO) to address price uncertainty in a bi-level market. We investigate the exercise of market power: (1) wholesalers as leaders or (2) bilateral market power between manufacturers and wholesalers. A numerical study of the power generation market is conducted to validate the proposed stochastic MiCP models. The results show that price uncertainties in the upstream contract market have a significant effect in a bi-level market, and thus controlling price volatility in the upstream contract market will improve productivity and support policies. In addition, we suggest the wholesalers should be market leaders and the manufacturers should negotiate profit-sharing contracts with the wholesalers in a deregulated system.

Оцінка результативності ринку електричної енергії України

Ukraine obliged to implement the European electricity market model and introduce the European principles of the competition policy therein. One of the tasks is the introduction of permanent and quality market monitoring. However, the basis of such monitoringis still missing. Therefore, the article proposes a methodical approach to assessing the electricity market performance as a monitoring tool, which is based on key performance indicators and allows the regulator to timely identify and control disruptions, and market participants to make effective managerial decisions aimed at achieving the overall objective of its reforming. Assessment of the electricity market performance should be based on 12 local indicators distributed over 4 components, such as balance, variability, dynamism, and proportionality. Market research can be feasibly carried out by its segments (bilateral market, day-ahead market, intraday market and balancing market), as well as by different load modes (basic, peak, off-peak). The performance level can be determined based on the radar chart by comparing the area of the obtained figure with the area of the reference one. The database of this approach is the open-source data of the transmission system operator, the market operator, and other professional participants. In the article this approach was tested in the Ukrainian electricity market for the October 2021, which revealed the following: the overall performance of the Ukrainian electricity market was at a satisfactory level, including such segments as the bilateral market, the day-ahead market and the intraday market, while the performance of the balancing market was at the low level. The strongest components were dynamism and balance, while variability and proportionality were its weakest components.

Research on Dispatching Management of High Proportion New Energy Grid in the Electricity Market Environment

The electricity spot market can reflect the power supply and demand situation in real time through price signals, guiding users to shift peaks and fill valleys, and enhancing the level of new energy consumption. Gansu Province, one of the first pilot spot market provinces in China, has designed a bilateral spot market for generations and users. The power supply mode and grid operation mode will undergo changes according to the operation results of the power market to achieve the optimal allocation of power resources, thus posing a huge challenge to the original grid dispatching mode. The article analyses the dispatch management articulation model based on the high penetration of new energy grids in the power market reform, adapts the work focus after changes in the power market business, and explores efficient dispatching business processes for the power spot market to ensure a smooth transition of dispatching work and effective integration of the market business.

Marketing potential of the Sino-Russian bilateral agricultural export market

China and Russia are important agricultural countries in the world. Expanding exports and increasing sales of agricultural products play an important role in the economic development of both countries. To understand the current situation of agricultural exports of the two countries and formulate strategies to expand the marketing of agricultural products, this paper uses the UN Comtrade Database 2009-2018 on Chinese and Russian bilateral agricultural export sales and other trade data to calculate the (expansion margin) and (price margin) of agricultural exports, (quantity margin), to analyze the types, prices, and quantities of exported agricultural products. The results show that China exports to Russia mainly labor-intensive types of agricultural products such as processed agricultural and horticultural products, accounting for 87.46% of total agricultural exports on average. The increase in exports is mainly due to the continuous increase in the prices of exported agricultural products. Russia exports to China mainly land-intensive types of agricultural products such as animal products, grains, oilseeds and fat products, which accounted for an average of 79.07% of total agricultural exports. The increase in exports was mainly due to the continuous increase in types and quantities of agricultural products to develop the export potential of agricultural products and expand sales. In addition, China should expand the types and quantities of agricultural products exported, and Russia should increase the added value of agricultural products and raise the export prices of agricultural products.

Robust short-term scheduling based on information-gap decision theory for cascade reservoirs considering bilateral contract fulfillment and day-ahead market bidding in source systems

China is implementing a new power system reform, with one goal of renewable energy absorption such as hydropower. However, the forthcoming spot market challenges cascade hydropower generation in terms of the short-term hydro scheduling (STHS) problem. Specifically, STHS involves fulfilling bilateral market obligations and bidding for the day-ahead market with uncertainty. Coordination of these two tasks while managing market risks becomes a problem that must be urgently solved. Herein, we propose a method based on the information-gap decision theory (IGDT) to solve the cascade hydropower STHS problem, wherein the aforementioned tasks are coordinated simultaneously. The IGDT method was used to deal with the uncertainty of the day-ahead market price, and the robustness function was derived. A mixed-integer nonlinear programming model was used to describe the proposed problem, and a commercial solver was used to solve it. A four-reservoir cascade hydropower company was used as the research object. Through the robust dispatching results, the preset profit objectives of the power generation company were satisfied within the price information gap, and the day-ahead market bidding strategy and daily contract decomposition curve were obtained. The proposed model is found to be superior to the scenario-based probability method. Moreover, a comparative analysis of bilateral contract fulfillment showed that more profits can be obtained by coordinating contract fulfillment in the day-ahead market.

Grid Frequency Regulation Using Fuzzy-Logic Based PI Controller

In interconnected power system because of non-linearity of the governor, the contract violation and uncontracted load the frequency becomes unstable. In this paper, the frequency instability issue is presented by assuming two area restructured power system operating in bilateral market model. Moreover, a comparative study of Proportional Integral (PI) controller and the fuzzy logic tuned PI controller has been shown for generators running under the Automatic Generation Control (AGC) control loop.

Public Information and Sequential Learning in a Bilateral Market

Public Information and Sequential Learning in a Bilateral Market

Research on the Operation of e‐Commerce Enterprises Based on Blockchain Technology and Bilateral Platforms

E‐commerce platform enterprises have typical bilateral market characteristics. The e‐commerce platform provides real‐time communication services for buyers and sellers. Different buyers and sellers form crossnetwork characteristics. The formulation and implementation of bilateral strategies affect both the merchants and consumers’ choice of platform and registration transactions. This impact will directly lead to the transaction value of the platform. Then, the article builds an econometric model and empirically analyses the impact of e‐commerce platforms. The e‐commerce chain is a complex structure that consists of logistics, information flow, and capital flow and connects suppliers, manufacturers, distributors, and users in the industry together. Blockchain technology can be used as a large‐scale collaboration tool to adapt to supply chain management, the main factor that drives the market power of the enterprise. The research results show that the input costs of advertising, research and development, and employee training and the impact of long‐term investment and taxation on market forces are quite different in different industries, both positive and negative, and subsidies, inventory, and state‐owned holdings have a negative impact on the market power of companies in all industries. Finally, the competition strategy of e‐commerce platform enterprises is summarized. On the basis of the conclusions of the theory and case study, the paper puts forward specific suggestions and countermeasures for the competition strategy of e‐commerce platform enterprises in the bilateral network environment.

Does economic policy uncertainty affect cross-border M&As? —— A data analysis based on Chinese multinational enterprises

This paper analyzes the impact of economic policy uncertainty (EPU) of home and host countries on cross-border mergers and acquisitions (M&As) using EPU indexes and the amount and quantity of China's cross-border M&As in 21 countries from 2001 to 2017. First, we find that uncertainty in the economic policy of the home country drives cross-border M&As, uncertainty in the host country's economic policy significantly inhibits cross-border M&As, and when the economy is in a pro-cyclical period, alleviates the influence of the host country's economic policy uncertainty on M&As. Second, the impact of the host country's economic policy uncertainty on cross-border M&As differs before and after the financial crisis. The host country's economic policy uncertainty is positively correlated with cross-border M&As before the crisis and significantly negatively correlated with it after the crisis. Third, the impact of economic policy uncertainty in the home and host countries on cross-border M&as is significant in developed countries but not significant in developing countries finally, differences in bilateral uncertainty and bilateral market growth are significantly positively correlated with the scale of M&A

Economic Exchanges Management in the Exhibition Bilateral Market

The slowdown in Russian economy caused a drop in demand for exhibition business services. Operating in the segment of trade fairs organizing companies faced a decrease in the intensity of economic exchanges due to the outflow of customers. The paper considers modification of the exchange management in order to intensify the latter. The research methodology bases the provisions of the theory of bilateral markets, theories of management, marketing and logistics, methods of analysis and synthesis, as well as on the experience of exhibition activities. As a result of the study: the expediency of application by linear companies-organizers of the business model “two-sided market” was justified; the interpretation of business model determined by two-component functional two-stage system was given when the platform (service) is prepared within the linear fragment and then the main fragment turns on — two-sided market, providing intensification of exchanges management by means of asymmetric pricing strategies and network effects. Recommendations are formulated for practitioners who are puzzled by the problem of economic exchanges intensification. The combination of these theoretically and practically significant results develops the theory of two-sided exhibition markets, as well as provides scientific support in the format of recommendations and descriptions of tools that help exhibition business practitioners cope with the problem of managing economic exchanges.

Relevant Market Theory in the Digital Era：From the Unilateral Market to the Bilateral Market

With the rocketing of the industrial economy and the digital economy, the EU has introduced a heavyweight competition policy in 2019, “Competition Policy for the Digital Era”. The relevant market theory is becoming the key area of antitrust economic research, and its academic and practical status has continuously improved. Constructing and developing the relevant market theory in the Digital Era has become a significant research field. This article comprehensively reviews the relevant market theory evolution and frontier under assumptions of the unilateral market and the bilateral market, and tries to provide a theoretical and practical reference for the current antitrust economic research and law enforcement practice. The study shows that: （1）The relevant market theory is crucial in antitrust economics. Although some articles advocate weakening market definition, in most cases, the relevant market theory is still the base point for antitrust analysis. （2）The bilateral market characteristics of the Digital Economy present theoretical and practical challenges to the relevant market definition. Traditional methods, based on the unilateral market, cannot be directly applied to antitrust research in the Digital Economy. （3）The academic circles have conducted extensive research on the relevant market theory in the bilateral market, but there are still many shortcomings in theoretical research and empirical analysis. We are so “ignorant” about the relevant market theory in the Digital Era.

Research on Decentralized Trading Strategy of Electricity Market Based on Blockchain Technology

With the gradual opening of the bilateral electricity market and the increase in distributed new energy generation, under the new market structure, various types of members should be encouraged to develop flexible cooperation and competition models in the new situation in order to improve the operating efficiency in the electricity market, encouraging the reduction of operating costs to improve the economic benefits of the market. Based on the relevant theories of blockchain technology, this paper proposes a decentralized small-scale distribution network intra-network transaction model and market mechanism, which can eventually be truly decentralized and achieve a lower cost and high efficiency market.

Study on New Media Platform Operation Model Based on Bilateral Market Economy

In the process of development, new media presents a completely different development mode from traditional media, namely, platform development mode. Under the effect of network effect, the new media platform can quickly gather a large number of users, and integrate the resources of all the endpoints on the platform through the platform operation, so that the information production becomes efficient and the phenomenon of collaborative production appears. The value of media platform development is mainly reflected in the construction of its bilateral economic model, and the key to the construction of the bilateral model lies in the transformation from the scale economy of the demand side to the scope economy of the supply side. This paper explores a service-oriented new media operation platform under the bilateral market economy mode, to construct a price structure for bilateral users, from the perspective of free mechanism, attention economy and supply side economies of scope. This new media operation platform can break the barriers of single information flow, build unlimited value-added services, promote the integration of information flow, capital flow and logistics platform, and thus create a service-oriented new media platform.