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Choice of pricing and advertising schemes for a two‐sided platform

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  • Yongyi Zhou
  • Yulin Zhang
  • Mark Goh

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.

Suggested Citation

  • Yongyi Zhou & Yulin Zhang & Mark Goh, 2021. "Choice of pricing and advertising schemes for a two‐sided platform," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1865-1885, October.
    • Handle: RePEc:wly:mgtdec:v:42:y:2021:i:7:p:1865-1885
    DOI: 10.1002/mde.3351
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    Cited by:

    1. Haowen Fan & Yulin Zhang & Yang Geng, 2022. "How to avoid your opponent's aggressive competition? The interplay between same‐side network externality and agent information level in two‐sided markets," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 2794-2816, October.
    2. Chokri Aloui & Khaïreddine Jebsi, 2022. "Does corporate social responsibility solve the chicken‐and‐egg problem for a two‐sided platform?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3235-3256, October.
    3. Yongyi Zhou & Yulin Zhang & M.I.M. Wahab, 2022. "Optimal pricing and choice of platform advertising schemes considering across‐side network effect," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 1059-1079, June.

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