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Events

Platform Competition under Network Effects

 

When: 10:00 am - 12:00 am, April 30

Where: Classroom 3C, Building No. 25, Peiyangyuan Campus

Lecturer: Wu Dongjun, Professor of Georgia Tech

About the Lecture: A repeated challenge in launching a two-sided market platform is how to solve the “chicken-and-egg" problem. The solution often suggested in the literature is subsidizing one side of the market to jumpstart adoption of the platform. In this paper, using a game-theoretic framework, we study piggybacking - importing users from external networks - as a new approach to launching platforms. Our finding suggests that optimal use of the piggybacking strategy depends on the cross-side network effects. First, benchmarked with the case of no piggybacking, we find that the pricing impacts of piggybacking is non-trivial. It may help mitigate or avoid price competition. Second, we show that platform duopoly with piggybacking can become a “game of chicken" or even a prisoner's dilemma, which implies that platforms are not always better off (sometimes even worse off) with piggybacking. Finally, when piggybacking users are fabricated (e.g., zombies or fake users), the platform strategies differ greatly from the authentic piggybacking case. It also undermines both the competing platform's prot and the providers' surpluses. Managerial implications for platform practitioners are also discussed.

All students and staff of Tianjin University are welcome.

日期 April 30 星期 Tuesday