Cross-network Externalities Research Articles

Continuous adoption of online healthcare platforms: an extension to the expectation confirmation model and network externalities

BackgroundOnline healthcare platforms (OHPs) promote the accessibility of health services while integrating online and offline service delivery. Continuous adoption of these platforms can reduce the information asymmetry between patients and healthcare providers. However, existing study has rarely focused on how the network externalities of these platforms influence patients’ continuous adoption. Expectation Confirmation Model (ECM) explains the continuous behavior after initial adoption and reveal the factors influencing satisfaction and continuous adoption intention. Few studies have integrated network externalities with the ECM to understand patients’ continuous adoption of OHPs.ObjectiveThis study aims to explore what factors affect the continuous adoption of OHPs based on an extension to the ECM and network externalities. We propose a comprehensive model for the continuous adoption of OHPs by patients with chronic diseases. We extend the conceptual framework by incorporating constructs related to perceived value, habits, and switching costs.MethodsThis study utilized a web-based survey to collect data from participants in China. We selected a sample of individuals who had experience with OHPs using a random sampling method. This method ensured that participants was randomly chosen from a pool of patients without any regional bias. A total of 568 questionnaires were collected and 518 valid questionnaires were obtained. Structural equation modeling was applied to assess the relationships among the constructs. Hierarchical regression analysis was utilized to examine the moderating effects, while the mediating effects were investigated using the bootstrapping approach.ResultsDirect network externality had significant positive impacts on the confirmation (β = 0.232, p < 0.001) and perceived value (β = 0.167, p < 0.010). Cross network externality had significant positive impacts on confirmation (β = 0.307, p < 0.001) and perceived value (β = 0.120, p < 0.05). Indirect network externality had significant positive impacts on confirmation (β = 0.169, p < 0.010) and perceived value (β = 0.270, p < 0.001). Confirmation had a significant positive impact on perceived value (β = 0.205, p < 0.001) and satisfaction (β = 0.508, p < 0.001). In addition, satisfaction had a significant positive impact on continuous adoption intention (β = 0.579, p < 0.001). Continuous adoption intention had a significant positive impact on continuous adoption behavior (β = 0.547, p < 0.001). Confirmation and perceived value significantly mediate the relationship between network externalities and satisfaction. Moreover, both confirmation and perceived value enhance continuous adoption intention by positively influencing satisfaction, which serves as a mediator. Additionally, confirmation directly influences satisfaction through the mediating role of perceived value. Habits and switching costs positively moderate the relationship between continuous adoption intention and behavior.ConclusionsThis study contributes by expanding the incorporation of network externalities into the ECM. Results enrich the existing literature on the continuous adoption of professional online platforms.

Pricing strategy for cross-market two-sided platforms based on joint membership system

Taking the joint membership system carried out by two cross-market bilateral platforms as the background, this paper studies how to achieve the optimal cooperation between two cross-market platforms, and analyzes the various influences brought by platform differences. Considering two cross-market two-sided platforms with differences basic services, we establish a horizontal cooperation model for cross-market bilateral platforms based on the joint membership system. Taking cross-network externalities as the starting point of the research, we compare and analyze the platform strategies under decentralized decision making and joint centralized decision making to obtain the benchmark for joint membership cooperation. Finally, we propose a two-part pricing mechanism that can make joint membership cooperation achieve the best, and analyze the impact of basic service differences on platform pricing, user participation, platform profits and coordination mechanism.

Pricing Models for Crowdsourced Logistics Platforms: A Two-Sided Market Perspective

The application of the crowdsourcing model to instant delivery has achieved remarkable success. Various crowdsourced logistics platforms have successfully addressed the challenges of last-mile delivery in urban areas by eliciting the active involvement of the public. This study takes a dual-market perspective and, considering the high requirements of instant delivery for timeliness, introduces two crucial factors: platform subsidies and the degree of public involvement. We establish a pricing model based on the Hotelling model and conduct in-depth research on the platform’s maximum profit and equilibrium pricing under different user attribution conditions. This study reveals that when the dispatching party has a single attribution, the platform can increase profits by reducing the intensity of cross-network externalities or increasing user transfer costs. In cases where the dispatching party has partial multiple attributions and the receiving party has a single attribution, lowering network externalities, increasing platform subsidies, enhancing public involvement, improving platform technical matching rates, and increasing the expected order quantity of the dispatching party all effectively increase the platform’s maximum profit. When both sides of users have partial multiple attributions, increasing public involvement increases the platform’s maximum profit. This research provides new theoretical support for the pricing strategy of crowdsourced logistics platforms.

Correction: Platform pricing and blockchain adoption for capacity sharing with cross-network externality and supply risk

Correction: Platform pricing and blockchain adoption for capacity sharing with cross-network externality and supply risk

Platform pricing and blockchain adoption for capacity sharing with cross-network externality and supply risk

Platform pricing and blockchain adoption for capacity sharing with cross-network externality and supply risk

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.

Value-added service investment and pricing decisions in two-sided platform: the role of user expectations

PurposeThis paper aims to investigate how user expectations affect value-added service (VAS) investment and pricing decisions of two-sided platforms. It draws on the information asymmetry theory and offers suggestions on how platform operators can manage user expectations.Design/methodology/approachAccording to the game theory, this study considers three user expectations (responsive, passive and wary). By framing the Hotelling duopoly model and comparing the VAS investment, price and platform profits, the optimal platform decision is analyzed and discussed.FindingsThe conclusions demonstrate that the monopolistic two-sided platform obtains more profits from the informed users with responsive expectations than uninformed users with passive or wary expectations. The marginal investment cost and cross-network externalities are two key factors that determine the platform's VAS investment and pricing strategies of passive or wary users. Furthermore, considering the expectation preferences, i.e. the uniformed users hold wary expectations with more information and hold passive expectations with less or no information, the results suggest that the proportion of wary users to all uninformed users increases the platform's VAS investment, profits and the price of informed users, and increase (decrease) the price of uninformed users when the cross-network externalities of informed users are relatively small (larger).Practical implicationsThese results can provide insightful enlightenment into how platform operators utilize bilateral users' expectations and information level to guide their VAS investment and pricing decisions.Originality/valueThis paper is one of the first to explore the impact of three user expectations and the heterogeneity of preferences in informing users' passive or wary expectations, based on different levels of information on the decision-making of two-sided platforms regarding VAS.

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.

The expansion and stability of two-sided platform ecological networks: an analysis based on the leverage theory of tying

PurposeWith the rapid development of the digital economy, an increasing number of digitalized two-sided platforms have deployed the tying strategy to leverage their market power from the core two-sided product to other two-sided products in the competitive market, which transforms the competition among single platforms into that among platform ecological networks. To clarify the mechanism of the formation of the digital platform ecological networks, this paper aims to analyze the expansion and stability of platform ecology by exploring the impacts of network externalities and sellers’ heterogeneity on the tying strategy of two-sided platforms.Design/methodology/approachThis paper develops a game model of two-sided platforms based on Choi and Jeon (2021), which highlights the decisive influence of non-negative price constraints (NPC) on platforms’ tying motivation. Taking the operating systems market as an example, we expand from the perspective of platform service differences to relax the NPC and explore the internal logic of platform ecosystem expansion.FindingsPlatforms have an incentive to charge lower prices or even subsidize buyers when the network externalities on the sellers’ side are relatively strong. When the product is highly differentiated and heterogenous, platforms are motivated to tie to capture more buyers with a lower price and grab excess profits from sellers. Eventually, tying is able to consolidate the two-sided platform ecological networks by excluding competitors, capturing user value and deterring entry.Originality/valueIn order to describe the characteristics of platform ecological network more generally, this paper extends the research based on the analyses of Choi and Jeon (2021) by (1) allowing horizontal differences between tied products and (2) relaxing the NPC. Unlike Choi and Jeon (2021), this paper allows platforms to charge users of two-sided platforms at negative prices (or to subsidize them). (3) Setting simultaneous pricing in two-sided platforms. Classical two-sided market theory stresses that the presence of cross-network externalities can give rise to a “chicken and egg” problem.

Research on the Revenue Management of Network Video Platform Based on Game Theory

To study how the network video platform can improve revenue and optimize the revenue structure, we construct an asymmetric competition model between free and paid platforms based on game theory, and the impact of the positive and negative cross-network externalities and program differentiation on platform’s competition and revenue are analyzed. The results show that changes in the relative relationship of positive and negative cross-network externalities may lead to free platform exiting the consumer market or paid platform exiting the advertising market. Only when the ratio of positive and negative cross-network externalities is moderate, the free and paid platform coexist, and the greater the difference of program, the greater the possibility of coexistence. With the effect of the positive and negative cross-networks externalities, the multi-revenue structure of the payment mode is not always better than the single revenue structure of the free platform. In addition, the impact of the positive and negative cross-network externalities and program differentiation on the revenue of free and paid platforms are nonlinear. If the platform wants to achieve greater revenue through the adjustment of revenue structure, it should fully consider the relative relationship of positive and negative cross-network externalities and program differentiation, otherwise it may bring losses.

A study on interplatform competition based on a Lotka–Volterra competition model focusing on network externality

Based on a Lotka–Volterra model of ecological population competition, this paper introduces cross-network externality parameters to develop a bilateral platform dynamic competition model. Using this new model, we analyze the influence of cross-network externalities on the equilibrium market structure of platform competition and the dynamic evolution of the market structure of platform competition. First, relying on the analytical results, we explore the influence of the platform’s own cross-network externalities and the mutual inhibition effects on the equilibrium market structure of platform competition. The analysis results show that when two platforms are in a competitive relationship, the impact of the intrinsic growth rate of platform users on the coexistence area can be ignored, but the impact on the monopoly area is greater. When the growth rates of the two platforms differ greatly, the platform with the higher growth rate can easily monopolize the market, without considering the inhibitory effect of the opponent. Therefore, the optimal strategy for the platform is to compete for traffic and gain a short-term advantage. In addition, when cross-network externalities and mutual inhibition effects meet certain conditions, i.e., θi+|rji|<1, competitive platforms can maintain a stable and coexisting market structure. Second, we build a three-platform competition model to study the impact of the introduction of the third platform on the market structure and investigate the conditions under which new platforms can enter the market stably. The results show that when the new platform cannot bear the threshold of competition pressure from the duopoly, even if it improves the platform’s own cross-network externalities, the new platform cannot gain a foothold in the market. Finally, we conduct an empirical analysis of the competitive relationship between two online food delivery platform giants: Ele.me and Meituan. We verify the conclusions drawn from the theoretical research and predict the development status and trends of the online food delivery platform market.

Platform subsidy policy design for green product diffusion

With the advent of information technology, online platforms have become an vital intermediary for acquiring green information and purchasing green products. This study uses two-sided market theory to estimate the size of the green market for green subsidies under various targets. First, we compare the differences in the equilibrium market size and platform profits for three scenarios (no subsidy, maximum platform profits, and maximum social welfare). In addition, we measure the basic conditions for start-up subsidy schemes. Finally, we employ numerical analysis to explore how other critical factors, including cross-network externalities, product pricing, and research and development (R&D) costs, impact the market size in three scenarios. The result demonstrates how online platforms use cross-side network externalities to design asymmetric pricing strategies or subsidy policies to develop the market for green products. It has managerial implications for online platform owners or politicians in subsidizing the expansion of green products.

Pricing Strategy and Simulation of Forest Rights Exchange Centers Based on the Two-Sided Market Theory

There is considerable room to develop an appropriate pricing mechanism for the forest rights transactions in China. In order to solve collective forest rights transactions, this study evaluated the pricing strategy of a forest rights exchange center. Based on the two-sided market theory, the pricing model of a forest rights exchange center was constructed and the price structure that maximizes profit and social welfare was discussed. In addition, the rationality of the theoretical derivation was verified through numerical simulation. The results show that several factors affected the pricing strategy of a forest rights exchange center in a two-sided market, including service level, as well as intragroup externality and cross-network externality. First, according to the different externalities of the cross-network between the two parties, a forest rights exchange center can introduce price preference and subsidy mechanisms to maximize the benefits of the supply and demand. Second, the government should encourage the establishment of trading alliances among village communities to reduce the scale of supply and demand and competition among them. Third, several measures should be made to improve the service level of a forest rights exchange center. Furthermore, it is very important to establish and perfect the two-sided market for forest rights transactions under the current policy conditions. Forest rights exchange centers should formulate differentiated pricing strategies to standardize the management of the forest rights exchange market.

Hybrid Platform Operation Decision of Retail Enterprises

The development of e-commerce has formulated the hybrid platform mode for retail enterprises. We studied how the differences in product distribution cost, unit retail price, and competition conflict affect the business model decision making. The theoretical model shows the following results: (1) When the hybrid platform sells complementary products with third-party sellers, the profit of choosing the hybrid mode is always the best. (2) When the hybrid platform competes with third-party sellers, if the unit retail price is in a higher range, the merchant mode is the best choice; when the unit retail price is in the lower range, the hybrid platform mode is the best choice. (3) Competition between the hybrid platform and third-party sellers determines the profit level of the operating enterprise. The excessive price competition between the self-operated business and the third-party sellers is magnified by the existence of cross-network externalities, resulting in a strong anti-competitive effect, and affecting the profits of the hybrid platform’s two businesses. These findings guide retail enterprises to design their business model as well as address competition conflict.

Pricing Analysis of Online Shopping Platforms Considering Consumer Information Levels.

To address the problem of frequent dishonest transactions by online shopping platform merchants, we developed monopoly and competitive platform pricing models based on two-sided market theory, which introduce consumer information levels. This article analyzes the incentives of the platforms to improve consumer information levels in platform pricing strategies. Monopoly online shopping platforms aim to maximize profits. The higher the consumer information level is, the lower the fees charged to merchants; this can lead to increased platform profits. The charging of consumers depends on cross-network externalities. Competitive online shopping platforms also aim at maximizing profits. Under the circumstance that the number of consumers remains the same, the higher the consumer information level is, the more merchants the platforms will attract. This reduces bilateral user fees, and platform profits will be lower. From the perspective of consumer information level, the article analyzes the impact of monopoly and competitive platforms adopting return measures to improve the level of consumer information on platform pricing, number of bilateral users, and profits.

Pricing strategy and performance investment decisions in competitive crowdfunding markets

The pricing strategy and decision-making investments of crowdfunding platforms are crucial for crowdfunding. This study examines how crowdfunding platforms influence platform profits by utilizing the mixed strategies of pricing strategy and investment decisions. According to the Hotelling specification and the characteristics of crowdfunding markets in which fundraisers are single homes and funders are multiple homes, this paper explores how “all or nothing” crowdfunding platforms set prices to balance the revenues and the costs of performance investment and thus maximize platform profits. We find that the investment level of crowdfunding platforms is determined by the difference in the preferences for performance investment between funders and fundraisers. In addition, the cross-network externalities of investors, the horizontal differences between platforms, the proportion of transaction fees drawn by platforms, and the range of the fundraisers’ fixed costs all play roles in shaping the pricing strategy and performance investment strategy of crowdfunding platforms.

Artificial Intelligence and Multimedia Technology in the Construction of Performance Courses

<p style="text-align: justify;"><span style="font-family: "times new roman"; font-size: 16px;">In a two-sided market, the two-sided platform may choose to invest in service effort to attract buyers and sellers, meanwhile buyers and sellers are price-sensitive. This paper investigates how the two-sided platform sets her pricing and service effort strategies when the buyers and sellers are price-sensitive. The equilibrium strategies are derived when the platform does not offer service effort and when the platform offers service effort. The results indicate that, the cross-network externality does not impact on the price when the platform does not offer service effort, but it impacts on the price positively when the platform offers service effort. Meanwhile, the price-sensitivity impacts on the platform’s profit and optimal scales of buyers and sellers negatively. Then, the results show that the optimal strategy for the platform is offering service effort, but it may hurt the buyers and sellers’ surplus and social welfare in certain scenario.</span>

Bilateral value-added services and pricing strategies of the third-party platform considering the cross-network externality

This paper studies bilateral value-added services and pricing strategies of the third-party platform for manufacturing, in which we consider the cross-network externality and value-added service affecting the utility of manufacturers and suppliers joining the platform. By constructing a game theory model, we analyze the optimal decisions of the platform, and propose four different bilateral value-added service and pricing strategies, then discuss the influence of the cross-network externality strengths on the optimal decisions of the platform as well as the impact of the platform providing value-added services. Our results show that the platform’s service efficiencies determine the difference of its bilateral value-added service levels. The platform will provide a higher service level for the side with higher service efficiency, but not always charge them more. When the service efficiency to manufacturers is higher than that to suppliers, the platform provides a relatively high value-added service level with a relatively low price for manufacturers and a relatively low value-added service level with a relatively high price for suppliers in some conditions. Moreover, the strengths of the manufacturer’s and the supplier’s cross-network externality have different effects on the optimal decisions of the platform. With the supplier’s cross-network externality strength increasing, the platform may increase the value-added service level and the price for both manufacturers and suppliers. But with the manufacturer’s cross-network externality strength increasing, the platform won’t do that anymore. It will always increase the value-added service level but reduce the price for manufacturers. Meanwhile, it will increase both the value-added service level and the price for suppliers. Besides, comparing with the case of no value-added services, we find that when the platform provides value-added services for bilateral users, the platform always charges suppliers a higher price, but may charge manufacturers a lower price.

Pricing mode selection for the online short video platform

Online short video platform usually adopts advertising mode and mixed mode as the pricing mode. How to choose the optimal pricing mode for the online short video platform is a topic worthy of our attention. This paper discusses the pricing mode that should be adopted by the online short video platform and investigates the effects of the viewer’s nuisance cost and cross-network externality intensity on the pricing mode selection of short video platform. The results show that, when the viewer’s nuisance cost is low and the intensity of cross-network externality is high, the platform should choose the advertising mode; otherwise, it should choose the mixed mode; when the cost is high and the intensity is low, the advertising price under the advertising mode is higher than that under the mixed mode; otherwise, the advertising price under the advertising mode is lower than that under the mixed mode; when the cost is relatively low and regardless of the intensity, the payment cost under the mixed mode is higher than that under the advertising mode; otherwise, the payment cost under the mixed mode is lower than that under the mixed mode. Importantly, we also find that, under certain conditions, interests of online short video platform and video content providers may be inconsistent.

Market segmentation on dating platforms

Individuals from two populations seek matchmaking services from competing dating websites. Each population is heterogeneous along an objective quality rank and matched couples experience disutility if there are incompatibilities in their quality ranks. Individuals in the populations care also about other traits that they wish their partner to possess. They are more likely to find a partner possessing such traits, the bigger the population served by the website. We investigate whether price competition can lead to segmentation of the two populations. We find that segmentation arises, only if compatibility in quality is relatively important to individuals in comparison to the importance of matching with high quality partners and in comparison to cross network externalities. At the market equilibrium, too many men and women patronize the website that matches high quality individuals. Allowing websites to price discriminate between men and women reduces social welfare.