Research on the Pricing Strategy of “Internet +” Recycling Platforms in a Two-Sided Network Environment

Xiaodong Zhu and Wei Li
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Xiaodong Zhu: School of Management Engineering, Nanjing University of Information Science and Technology, Nanjing 210044, China
Wei Li: Chang Wang School of Honors, Nanjing University of Information Science and Technology, Nanjing 210044, China

Sustainability, 2020, vol. 12, issue 3, 1-19

Abstract: “Internet +” platform recycling is an emerging business model with two-sided market characteristics. How to meet the needs of consumers and manufacturers and how to formulate a reasonable two-sided pricing structure have become challenges faced by recycling trading platforms. Based on the theory of a two-sided market, the pricing mechanism of a monopoly platform and a model of competing platforms are studied. Consequently, a sensitivity analysis and comparison analysis are conducted, giving a pricing decision and the optimal profit of closed-loop supply chain systems. Finally, through a numerical simulation analysis, the impacts of the inter-group network externalities, service differentiation, and the matching efficiency on e-waste recycling prices and profits are obtained. The result indicates that the influences of inter-group network externalities on monopoly platforms and competing platforms are different; thus, platforms should choose pricing strategies according to their own market position. The pricing of the two types of platform is inversely proportional to the time-sensitive coefficient of the two platforms, while it is directly proportional to the matching efficiency. The improvement of the differentiation of service will increase the pricing of the platform for single-homing manufacturers without affecting the multi-homing consumers, and profits will increase accordingly.

Keywords: two-sided market; inter-group network externality; closed loop supply chain; game theory; remanufacturing (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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