Academy of Mathematics and Systems Science, CAS
Colloquia & Seminars

Speaker:	李武, 加拿大温莎大学商学院
Inviter:	杨晓光
Title:	A Co-Opetitive Game Analysis of Platform Compatibility Strategies Under Add-on Services
Language:	English
Time & Venue:	2023.07.04 16:00-18:00 南楼402
Abstract:	Large-scale platforms (LSPs) with valuation and awareness advantages have enabled competing small-scale platforms (SSPs) to be embedded in their platforms. This compatibility strategy creates a new channel, the compatible channel, through which customers can purchase services from an SSP via the LSP. Meanwhile, more platforms have been introducing add-on services to enhance their profitability. This study develops stylized game models to characterize the interaction between an LSP and an SSP, and explores their strategic and operational decisions on platform compatibility under add-on services. Our major research findings are as follows. First, we identify the conditions for platform compatibility: compatibility becomes an equilibrium strategy if the proportion of demand through the compatible channel falls within an intermediate range. Second, compatibility has opposite impacts on service pricing: At a low proportion of demand through the compatible channel, the two platforms engage in a price war; otherwise, they both raise prices. Third, we find that homogeneous add-on services stimulate rather than inhibit compatibility due to different foci of the two platforms. Finally, we conduct model extensions to further verify the robustness of the conclusions. Our results provide important implications to the burgeoning debate on when platforms should implement compatibility to achieve a win-win scenario under a variety of settings.