Platform launch in two-sided markets and users’ expectations

Yang Geng and Yulin Zhang

Physica A: Statistical Mechanics and its Applications, 2020, vol. 558, issue C

Abstract: This paper analyzes the effect of users’ expectations on the dynamic process of users’ subscriptions based on the Bass model. We find that in all cases, the platform can make a successful launch if and only if the initial point is above the critical trajectory. If the probability that users on one side base their expectations on the number of subscribers on the same side is high, the launch of the platform will be easier when platform managers give priority to attracting users on this side. In addition, users’ expectations cannot change ex post equilibria when users are rational. However, if users on one side have pessimistic expectations, a high growth rate on this side makes it harder for the platform to launch.

Keywords: Diffusion; Bass model; Expectations; Two-sided markets (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S037843712030515X
Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:558:y:2020:i:c:s037843712030515x

DOI: 10.1016/j.physa.2020.124987

Access Statistics for this article

Physica A: Statistical Mechanics and its Applications is currently edited by K. A. Dawson, J. O. Indekeu, H.E. Stanley and C. Tsallis

More articles in Physica A: Statistical Mechanics and its Applications from Elsevier
Bibliographic data for series maintained by Catherine Liu ().