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Service Investment and Pricing Strategies in E-Commerce Platforms With Seller Competition

Author

Listed:
  • Yanan Ji

    (Hefei University, China)

  • Yi Li

    (Hefei University, China)

  • Wenzhi Tang

    (Hefei University, China)

Abstract

With the development of the two-sided market, many platform enterprises classify their users into different types and cooperate with them with different strategies. The extant literature mainly explores the pricing and investment decisions for the platform, but pays little attention to the classification of sellers when making decisions. This paper investigates the investment of value-added service and pricing strategies for an e-commerce platform with competing sellers. Specifically, this paper considers a two-sided platform that is composed of an e-commerce platform, buyers and sellers. Sellers with high performance requirement and with low performance requirement compete for the buyers in the platform. This paper assumes that each buyer will choose the sellers’ type immediately after entering the platform and buy a unit of product in the platform. Through theoretical analysis the authors show that, the platform will gain more profits by investing in value-added services for type-A sellers and it will obtain the optimal profit when the transaction fee is moderate.

Suggested Citation

  • Yanan Ji & Yi Li & Wenzhi Tang, 2022. "Service Investment and Pricing Strategies in E-Commerce Platforms With Seller Competition," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 15(1), pages 1-21, January.
    • Handle: RePEc:igg:jisscm:v:15:y:2022:i:1:p:1-21
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    References listed on IDEAS

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    1. Xumei Zhang & Xiaopeng Han & Xiangyu Liu & Ru Liu & Jinzhong Leng, 2015. "The pricing of product and value-added service under information asymmetry: a product life cycle perspective," International Journal of Production Research, Taylor & Francis Journals, vol. 53(1), pages 25-40, January.
    2. Yunpeng Yue & Tiaojun Xiao, 2020. "Pricing and Bundling Strategies for Competing Mobile Phone Supply Chains With Network Externality," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 13(3), pages 54-77, July.
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    Cited by:

    1. Lei Zhou & Yue Qi & Xinshang You, 2023. "Research on Time to Market and Pricing of Platform Products in a Competitive Environment," Sustainability, MDPI, vol. 15(7), pages 1-19, March.
    2. Zhu, Weijun & Xie, Jiaping & Xia, Yu & Wei, Lihong & Liang, Ling, 2023. "Getting more third-party participants on board: Optimal pricing and investment decisions in competitive platform ecosystems," European Journal of Operational Research, Elsevier, vol. 307(1), pages 177-192.
    3. Ling Liang & Zishu Han & Jiaping Xie & Jialiang Wang & Nan Shi & Weijun Zhu, 2022. "S&T Innovation Platform Sharing Service Contract Mechanism to Achieve Supply Chain Resilience," Sustainability, MDPI, vol. 14(21), pages 1-19, October.

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