Highlights Discusses the platform's pricing strategy and mode selection by the Hotelling model. Considering the factors such as network effect and levels of user involvement. Multi-homing on agents could make RSP subsidize agents, and AP charges higher fees. RSP with access to aggregation harms its service providers in specific conditions. Multi-homing on agents benefits RSP and social welfare with RSP accessing specific conditions.
Abstract As the platform of Ride-Sharing Platforms (RSPs), the Aggregation Platform (AP) integrates resources from RSPs which provide an on-demand car-sharing service by matching suitable passengers and drivers. From the view of the platform, consumer surpluses and social welfare, this paper discusses the platform's pricing strategy and mode selection (single-homing or multi-homing on agents) by the Hotelling model considering network effect and levels of user involvement. Research findings include whether RSP accesses the aggregation, the single-homing or multi-homing on the agents does not affect the agent fees both platforms charged. The multi-homing on agents makes the platform accessible to agents if the RSPs are not integrated into the aggregation platform. The multi-homing on agents makes the RSP subsidize agents, and AP charges higher fees to agents when RSP accesses the aggregation. Furthermore, under single-homing or multi-homing on the agents, the RSP with access to the aggregation will permanently harm its service providers but benefit AP and social welfare in specific conditions. Additionally, the multi-homing on agents will harm the aggregation platform service providers but benefit RSP and social welfare in specific conditions when the RSP accesses.
Pricing strategy and platform competition with partial multi-homing agents: When the aggregation platform exists in ride-sharing market
2024-02-26
Article (Journal)
Electronic Resource
English
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