Research on the Pricing Strategy of “Internet +” Recycling Platforms in a Two-Sided Network Environment

• Main Authors: Xiaodong Zhu, Wei Li
• Format: Article
• Language: English
• Published: MDPI AG 2020-01-01
• Series: Sustainability
• Subjects: two-sided market; inter-group network externality; closed loop supply chain; game theory; remanufacturing
• Online Access: https://www.mdpi.com/2071-1050/12/3/1001

“Internet +” platform recycling is an emerging business model with two-sided market characteristics. How to meet the needs of consumers and manufacturers and how to formulate a reasonable two-sided pricing structure have become challenges faced by recycling trading platforms. Based on the theory of a two-sided market, the pricing mechanism of a monopoly platform and a model of competing platforms are studied. Consequently, a sensitivity analysis and comparison analysis are conducted, giving a pricing decision and the optimal profit of closed-loop supply chain systems. Finally, through a numerical simulation analysis, the impacts of the inter-group network externalities, service differentiation, and the matching efficiency on e-waste recycling prices and profits are obtained. The result indicates that the influences of inter-group network externalities on monopoly platforms and competing platforms are different; thus, platforms should choose pricing strategies according to their own market position. The pricing of the two types of platform is inversely proportional to the time-sensitive coefficient of the two platforms, while it is directly proportional to the matching efficiency. The improvement of the differentiation of service will increase the pricing of the platform for single-homing manufacturers without affecting the multi-homing consumers, and profits will increase accordingly.