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| Research on Performance Investment and Advertising Pricing Decisions of Online Service Platform with Network Externalities |
| SHI Lili，LIN Jun |
| Xi’an Jiaotong University, Xi’an, China |
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Abstract In order to balance user experience and enterprise profit, the online service platform sponsored by advertisers needs to determine the level of investment in platform performance and advertising pricing strategy. In this study, the online service platform with direct and indirect network externalities sponsored by advertisers is taken as the research object. Based on the three-stage game model, the platform performance investment and advertising pricing strategies in monopoly and duopoly scenarios are studied. The results show that: the performance investment and advertising pricing of the platform increase with the increase of the platform’s direct network externality, and the platform should focus on the improvement of user stickiness in the monopoly scenario; while in the duopoly scenario, the stronger the substitution between platforms, the easier it is for users and advertisers to turn to the other platform, and the platform should continue to improve the differentiated competitiveness and reduce the platform’s reliance on direct network externalities.
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Received: 09 November 2019
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