Choice of pricing and advertising schemes for a two‐sided platform. (25th April 2021)

• Record Type: Journal Article
• Authors: Zhou, Yongyi; Zhang, Yulin; Goh, Mark
• Is Part Of: Managerial and decision economics. Volume 42:Number 7(2021)
• Page Start: 1865
• Page End: 1885
• Publication Date: 2021-04-25
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.3351
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract : This paper examines the pricing and choice of advertising schemes for a two‐sided platform considering two business models, each with two advertising schemes. In the "1‐n" model, the prices on the provider side are the same in the two schemes; however, the price in the "1‐1" model is always higher under the "HA" scheme. The results suggest that the preferred choice for the platform regarding the advertising schemes is the same as that in the two models. We extend our model in several directions and draw some management insights for a two‐sided platform for the platform operator.