A two-sided market model of optimal price structure for instant messenger

Jun Xu

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Instant messenger; price structure; two-sided market (search for similar items in EconPapers)
JEL-codes: D43 L11 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/62960/1/MPRA_paper_62960.pdf original version (application/pdf)

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:pra:mprapa:62960

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().