A Two-Sided Market Model of Optimal Price Structure for Instant Messenger
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...
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2013-01-01
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| Series: | Journal of Applied Mathematics |
| Online Access: | http://dx.doi.org/10.1155/2013/768168 |
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| _version_ | 1849410732321406976 |
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| author | Jun Xu |
| author_facet | Jun Xu |
| author_sort | Jun Xu |
| collection | DOAJ |
| description | 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. |
| format | Article |
| id | doaj-art-5b1a362acb134fc69c3338d4f2db5b72 |
| institution | Kabale University |
| issn | 1110-757X 1687-0042 |
| language | English |
| publishDate | 2013-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Applied Mathematics |
| spelling | doaj-art-5b1a362acb134fc69c3338d4f2db5b722025-08-20T03:35:00ZengWileyJournal of Applied Mathematics1110-757X1687-00422013-01-01201310.1155/2013/768168768168A Two-Sided Market Model of Optimal Price Structure for Instant MessengerJun Xu0Institute of Industrial Economics, Jinan University, Guangzhou 510632, ChinaInstant 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.http://dx.doi.org/10.1155/2013/768168 |
| spellingShingle | Jun Xu A Two-Sided Market Model of Optimal Price Structure for Instant Messenger Journal of Applied Mathematics |
| title | A Two-Sided Market Model of Optimal Price Structure for Instant Messenger |
| title_full | A Two-Sided Market Model of Optimal Price Structure for Instant Messenger |
| title_fullStr | A Two-Sided Market Model of Optimal Price Structure for Instant Messenger |
| title_full_unstemmed | A Two-Sided Market Model of Optimal Price Structure for Instant Messenger |
| title_short | A Two-Sided Market Model of Optimal Price Structure for Instant Messenger |
| title_sort | two sided market model of optimal price structure for instant messenger |
| url | http://dx.doi.org/10.1155/2013/768168 |
| work_keys_str_mv | AT junxu atwosidedmarketmodelofoptimalpricestructureforinstantmessenger AT junxu twosidedmarketmodelofoptimalpricestructureforinstantmessenger |