The Impact of Two-Sided Market Platforms on Participants’ Trading Strategies: An Evolutionary Game Analysis

Yingxiu Zhao and Sitong Zhou ()
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Yingxiu Zhao: School of Economics, North China University of Science and Technology, Tangshan 063210, China
Sitong Zhou: School of Economics, North China University of Science and Technology, Tangshan 063210, China

Mathematics, 2023, vol. 11, issue 8, 1-18

Abstract: With the development of internet technology, more two-sided market platforms, e.g., Tabao, Amazon and Lending Club, have emerged, and it is worth exploring the role that these two-sided market platforms can play in better serving users. This paper explores the impacts of platforms on participants’ trading strategies in the two-sided market, taking the online loan market as an example. Based on the management strategies of online lending platforms, we divided them into two categories: active online lending platforms and inactive online lending platforms. Evolutionary game theory and numerical simulation were employed to investigate the influences of these two types of platforms on the trading strategies of lenders and borrowers. We found that active and appropriate management measures taken by active online lending platforms can steer lenders and borrowers towards adopting win-win trading strategies, thus attracting more high-quality borrowers and corresponding investors. These results imply that a platform with two-sided market characteristics plays a crucial role in coordinating and guiding participants on both sides, and active management measures adopted by the platform can promote the benign operation of the two-sided market.

Keywords: internet finance; evolutionary game; participant behavior; trading strategy; two-sided market (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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