Open Access
2013 A Two-Sided Market Model of Optimal Price Structure for Instant Messenger
Jun Xu
J. Appl. Math. 2013(SI08): 1-10 (2013). DOI: 10.1155/2013/768168

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.

Citation

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Jun Xu. "A Two-Sided Market Model of Optimal Price Structure for Instant Messenger." J. Appl. Math. 2013 (SI08) 1 - 10, 2013. https://doi.org/10.1155/2013/768168

Information

Published: 2013
First available in Project Euclid: 14 March 2014

zbMATH: 06950863
Digital Object Identifier: 10.1155/2013/768168

Rights: Copyright © 2013 Hindawi

Vol.2013 • No. SI08 • 2013
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