Operation implications of platform

Abstract

Platforms, or two-sided markets, are proliferating in many countries and many sectors of the economy. In these businesses, all the operational decisions are affected directly and indirectly by the platform structure and other market participants. In the first study, we present a model examining the endogenous platform formation by serving consumer of competing firms. We identify the efficiency-competition trade-off that drives the platform formation decision, and find two different selling policies, discriminatory and independent policies, could be optimal under different market conditions. In the second study, we analyze the impact of the used product reselling platform on the firms used product recollection policy in remanufacturing practice. Our results show that the secondary market affect trade-in and buy-back policies differently, such that optimal recollection choice depends on the remanufacturing efficiency as well as various market characteristics. Moreover, the existence of the secondary market may increase or decrease firms profit. In the third study, we consider the consumer optimal search behavior on the e-commerce platform, where the platform is able to track the consumer search history and share it to the sellers. We analyze the sellers' optimal pricing conditioning on search history and the platform's optimal information control. The results show that the platform only offers partial information to avoid both sellers being trapped in a prisoner's dilemma.</P> In the fourth study, we study the design of platform's recommendation system when facing consumers who are interested in joint purchase. We show that cross-store promotion benefits the sellers by alleviates the competition under given recommendation policy, and solve for the optimal recommendation policy.</P>

Date of Award	2019
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology