| dc.description.abstract | This dissertation is a collection of three independent yet related essays which study the topics on the two-sided market literature.
The ``two-sided market’’ is a new modeling approach that fits certain industries very well.
The common features of the two-side market industries are the presence of the intermediate platforms and the cross-side network effects.
The platforms facilitate the interactions of the users on the two sides,
and are able to charge a fee from each side of the market.
The platform users on one side have a higher willingness to pay for entering the platform with larger participation on the other side.
A new participant on one side therefore has an effect on the users from the other side.
As a consequence, the effect is defined as the cross-side network effect which is usually positive.
For enjoying more benefits of the network effect from the other side,
the users might have the incentive to enter multiple platforms.
Those who do enter multiple platform are defined as the users of multi-homing.
Comparing with the existing literature, the models in this dissertation provide more detail discussions about the users’’ interactions and multi-homing behaviors.
In particular, the interaction of the platform’’s pricing strategy and the users’’ behaviors.
Current dissertation contributes to the two-sided market literature by answering several important questions:
Where do the external effects come from,
what are the reasons make the users more willing to multi-home,
and how is the platform’’s pricing strategy interact with the cross-group network effects and the multi-homing behaviors.
The first chapter in current dissertation introduces the main issues in the two-sided market literature.
The three essays are organized as chapter 2, chapter 3 and chapter 4.
I provide the abstract of chapter 2, chapter 3 and chapter 4 as follows.
Chapter 2 provides a theoretical model for a specific type of two-sided platform: The buyer-seller transaction platform.
In the model, the number of participants and the source of network effects are endogenously determined.
The platform is shown to exhibit both positive cross-side and negative within-side network effects.
The optimal pricing of the platform depends not only on the cost of providing service and the benefits of the participants,
but also on how the marginal entrant (either a buyer or a seller) affects the matching probability.
Since the sellers can shift the burden of entry fee to the buyers, the platform never subsidizes the sellers.
In chapter 3, a model with two platforms, product heterogeneity and searching engine technology advantage is considered.
In the model, the sellers are allowed to multi-home and charge differently on each platform.
It has been proved that the buyers always benefit from advanced searching technology,
however, whether the sellers benefit from the advanced technology is determined by the degree of product heterogeneity.
If the degree of product heterogeneity is large enough,
then the sellers benefit from the advanced technology,
otherwise, the sellers will suffer from advanced technology,
for high competition pressure and low profits.
Furthermore, the model proves that the number of multi-homing sellers is at first increasing and then decreasing as the degree of new technology prevalence.
In chapter 4, a two-sided market model in which the multi-homing decisions of all users and the platform prices are endogenously determined is considered.
The results show that the platforms compete more aggressively when the users on one side switch from single-homing to multi-homing.
Furthermore, a homogenized effect which is neglected in existing literature is discovered.
Compared with the one-sided multi-homing case,
the equilibrium in the two-sided multi-homing case corresponds to a less effective cross-group network effect which causes the platforms reluctance to cross subsidize users.
Moreover, an increase of multi-homing choices made by users on one side makes the platforms more substitutable on the other side.
| en_US |