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Pricing and Subsidies

In: Platform Business Models

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  • R. Srinivasan

    (Indian Institute of Management Bangalore)

Abstract

Pricing in the case of platforms can also be different than traditional pipeline firms. Typically, one side of the platform is subsidized while the other side is monetized. Deciding which side to monetize and which side to subsidize is a critical platform decision. Over and above that, platforms need to define the right pricing model that accentuates network effects and enables sustained growth. These pricing models should increase customers’ (on both sides) willingness to affiliate (value addition), willingness to pay (brand strength), and willingness to stay (loyalty). This chapter highlights the criteria for making pricing decisions and enumerates a few key pricing models.

Suggested Citation

  • R. Srinivasan, 2021. "Pricing and Subsidies," Management for Professionals, in: Platform Business Models, chapter 0, pages 137-152, Springer.
    • Handle: RePEc:spr:mgmchp:978-981-16-2838-2_11
    DOI: 10.1007/978-981-16-2838-2_11
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