Ming Gao, Platform Pricing in Mixed Two-sided Markets, International Economic Review, 59-3, 2018.
Endorsed by National Natural Science Foundation of China, presented in 2015 at 6th Searle Center Annual Conference on Internet Search and Innovation (Northwestern University), 13th Annual International Industrial Organization Conference (IIOC, Boston), 6th Workshop on the Economics of ICTs (University of Évora, Portugal), etc.
When a consumer can appear on both sides of a two-sided market, such as a user who both buys and sells on eBay, the platform may want to bundle the services it provides to two sides. We develop a general model for such "mixed" two-sided markets, and show that a monopolist platform's incentive to bundle and its optimal pricing strategy are determined by simple formulas using familiar price elasticities of demand, which embody the bundling effect, and price-cost margins adjusted for network externalities, which incorporate "two-sidedness". The optimal pricing rule in such markets generalizes the familiar Lerner formula.
Key Words: two-sided market, platform, bundling, price elasticity of demand
JEL Classification: D42, L11, L12.
Ming Gao, Mingzhi Li, "Strategies for Developing China's Software Industry", Journal of Information Technologies and International Development, 2003, 1(1), 61-73, MIT Press
Ming Gao,Multi-Seller Access Pricing for Shopping Platforms.pdf, under review.
Best Paper Award, China Industrial Economics Research Annual Conference 2015, also presented in seminars at Oxford, Fudan, SJTU, Peking and UIBE, and in the following conferences: 2019 APIOC (Tokyo), 2019 AETW (Sydney), 2017 AMES (Hong Kong), 2017 Royal Economic Society Conference (Bristol), 2016 International Conference on Innovation and Industrial Economics (Nanjing), 2016 IOMS (Hong Kong), 2016 IIOC (Philadelphia), etc.
Through charging or subsidizing shoppers, a platform participates in the pricing game played by n hosted third-party sellers, who sell different products and share profits or revenues with the platform. The platform's equilibrium access price for shoppers is determined by bilateral effects between the platform and each seller. A "sharing effect" is represented by the profit or revenue share taken from a seller. A "buzz effect" embodies a seller's ability to attract shopper traffic to the platform through adjusting her own price, as measured by the platform's cross-price elasticity with respect to the seller's price. These effects are aggregated across all sellers, and deducted from the platform's standard markup. A positive access fee is optimal if the sum of profit shares taken from sellers does not exceed 1, or if the revenue-share sum does not exceed the per-shopper cost. When either sum exceeds a higher threshold, an access subsidy emerges. (JEL D21, D42, L11, L81)
Key Words: multiproduct pricing game, agency selling, subsidy.
Ming Gao, Travis Ng, Non-Price Discrimination by a Prejudiced Platform, under review.
Presented at 2017 Asian Meeting of the Econometric Society (CUHK), 2017 International Industrial Organization Conference (IIOC, Boston), 2016 International Conference on Innovation and Industrial Economics (Nanjing, China), 2016 9th bi-annual Postal Economics Conference on E-commerce, Digital Economy and Delivery Services (Toulouse School of Economics, France), etc.
Recent lawsuits and anecdotal evidence suggest that some platforms discriminate against certain users through non-price practices, discouraging their participation without directly increasing revenue. We show that a monopolist two-sided platform with a prejudice against certain users - modeled as more costly to serve - chooses to discriminate only if the cost savings from reducing such users' participation outweigh the network benefits they create. Surprisingly, user surpluses may increase under discrimination because the platform often voluntarily lowers price(s) - sometimes on both sides - to attract other users. Therefore, tightening anti-discrimination policies for platforms can increase price and decrease welfare.
Key Words: discrimination; prejudice; regulation; policies on platforms; two-sided market; non-price strategiesv
JEL Classification: D42, L11, L12
《国际经济学中的博弈论》，约翰•麦克米伦著，高明译，北京大学出版社2004年出版 (ISBN 7-301-06710-0/F.0724)
《经济学原理（第六版•下）》，卡尔•E. 凯斯、雷• C. 菲尔著，李明志、王斌、高明译，清华大学出版社2003年出版 (ISBN 7-302-06539-X/F.517)
“Multi-Seller Membership Pricing”
“An Economic Theory of App Review” (jointly with Travis Ng)
“Platform Pricing in Mixed Two-sided Markets”
“Profiting from Consumer Sophistication of Certainty Bias: Business and Policy Implications”, jointly with Jaimie Lien and Jie Zheng, endorsed project of the Tsinghua University Initiative Scientific Research Program
“A Platform Pricing Model for Mixed Two-Sided Markets”, jointly with Glen Weyl, Alexander White and Jie Zheng, endorsed project of the National Natural Science Foundation of China
“A Two-Sided-Market Approach to the Design of the Banking System”, jointly with Ping He, endorsed project of the Tsinghua University Initiative Scientific Research Program
“Corporate Governance of State-Owned Enterprises: the Double Agency Problem”, jointly with Ping He and Yao Lu, endorsed project of the National Natural Science Foundation of China
“Probabilistic Selling to Certainty-Biased Consumers” (jointly with Qining Yu)
“Free Gift as a Profitable Pricing Strategy”
“Multiproduct Pricing with Network Effects”