Value-added services decisions of bilateral platform with user expectation and resources constraint

Yunmiao Gui, Huihui Zhai and Feng Dong ()
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Yunmiao Gui: Anhui Polytechnic University
Huihui Zhai: Anhui Polytechnic University
Feng Dong: Anhui Polytechnic University

Electronic Commerce Research, 2025, vol. 25, issue 4, No 15, 2765-2793

Abstract: Abstract This paper studies the value-added services (VAS) investment and pricing strategies of monopoly bilateral platform with limited resources and asymmetric user information. By constructing a game theory model, we conclude that the platform earns higher profits when both of the bilateral users are informed than when the sellers are informed and the buyers are uninformed. The passive expectation of uninformed users weakens the monopoly power of platform pricing and causes lower platform profit. Additionally, the VAS investment and pricing strategies of the platform are jointly influenced by users’ cross-network externality and marginal utility. Among them, the platform investment is mainly related to marginal utility, and its pricing strategies depend heavily on the cross-network externality. Moreover,Uninformed users with passive expectation enforce the platform to invest all of the resources and higher service level in them when the cross-network externality of users on either side does not have a decisive advantage.

Keywords: Bilateral platform; Value-added services; Investment and pricing strategies; Cross-network externality; Passive expectation (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10660-023-09765-7

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