IDEAS home Printed from https://ideas.repec.org/a/taf/tprsxx/v61y2023i11p3829-3843.html
   My bibliography  Save this article

Multi-period price competition of blockchain-technology-supported and traditional platforms under network effect

Author

Listed:
  • Ting Zhang
  • Peimiao Li
  • Ningning Wang

Abstract

We build a multi-period pricing model between a blockchain-technology-supported platform and a traditional platform, where the blockchain-technology-supported platform provides a higher value for customers. Customers are influenced by network effect, that is, they value a platform more if the platform has more users. As either platform can adopt static pricing or dynamic pricing, four scenarios may occur. By deriving the equilibrium of each scenario, we reveal the 'Matthew effect' caused by network effect, that platform advantage (from adopting blockchain technology) or disadvantage (from not adopting blockchain technology) accumulates as time goes by. Thus, platforms are advised to adopt the blockchain technology antecedent to the competitors. Network effect, which amplifies the benefit of initial users, may intensify price competition and harm both platforms. By comparing the four scenarios, we derive the equilibrium pricing strategies: when network effect is weak, one platform adopts static pricing and the other adopts dynamic pricing; when network effect is medium, the blockchain-technology-supported platform adopts static pricing and the traditional platform adopts dynamic pricing; and when network effect is strong, both platforms adopt dynamic pricing. Dynamic pricing is more desirable for the traditional platform relative to the blockchain-technology-supported platform.

Suggested Citation

  • Ting Zhang & Peimiao Li & Ningning Wang, 2023. "Multi-period price competition of blockchain-technology-supported and traditional platforms under network effect," International Journal of Production Research, Taylor & Francis Journals, vol. 61(11), pages 3829-3843, June.
  • Handle: RePEc:taf:tprsxx:v:61:y:2023:i:11:p:3829-3843
    DOI: 10.1080/00207543.2021.1884308
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00207543.2021.1884308
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00207543.2021.1884308?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sui, Ronghua & Liu, Molin & Liu, Yi & Zha, Xiaoyu, 2024. "Two-sided dynamic pricing and value-added service investment strategies of competitive platforms considering indirect network effects," International Journal of Production Economics, Elsevier, vol. 272(C).
    2. Lu, Bo & Fan, Lijie & Wang, Huipo & Moon, Ilkyeong, 2024. "Price-cutting or incentive? Differentiated competition between regional asymmetric ports," Transport Policy, Elsevier, vol. 147(C), pages 215-231.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:tprsxx:v:61:y:2023:i:11:p:3829-3843. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TPRS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.