The optimal pricing strategy for two-sided platform delivery in the sharing economy

Nowadays many platforms emerge to provide delivery services by having independent shoppers to deliver groceries from independent retailers to consumers. To understand how to price this service, the authors formulate a two-sided platform’s profit maximization problem by considering network externality. They focus on three pricing strategies, membership-based pricing, transaction-based pricing, and cross subsidization. When time discounting is absent and consumers’ order frequency is price-insensitive, it is shown that these three strategies are equivalent. As membership-based pricing collects money the earliest and maximize price-sensitive order frequency, the authors' analysis explains some platforms’ promotion of it.

Language

  • English

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Filing Info

  • Accession Number: 01634116
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Apr 6 2017 4:34PM