A Two‐Sided Market Model of Optimal Price Structure for Instant Messenger

Jun Xu

Journal of Applied Mathematics, 2013, vol. 2013, issue 1

Abstract: Instant messenger (IM) is one of the most popular Internet applications all over the world. This paper examines the pricing problem of IM based on two‐sided market model. IM serves as a two‐sided platform, which gets both Internet users and advertisers on board. This paper concludes that IM operator adopts a heavily skewed price structure that favors IM users both under monopolistic case and under horizontal differentiated duopolistic case. When advertising revenue is large enough relatively to marginal cost for serving IM users, IM users can enjoy free service provided by IM operators. The competitive equilibrium of duopolistic case is not necessarily symmetric when advertisers choose singlehoming. Even in the symmetric equilibrium platform would rather deter all advertisers.

Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1155/2013/768168

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:wly:jnljam:v:2013:y:2013:i:1:n:768168

Access Statistics for this article

More articles in Journal of Applied Mathematics from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().