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Full-Text Articles in Physical Sciences and Mathematics
Platform Pricing With Strategic Buyers: The Impact Of Future Production Cost, Mei Lin, Xiajun Amy Pan, Quan Zheng
Platform Pricing With Strategic Buyers: The Impact Of Future Production Cost, Mei Lin, Xiajun Amy Pan, Quan Zheng
Research Collection School Of Computing and Information Systems
Two-sided platforms are often coupled with exclusive hardware products that connect two sides of users, the consumers of the hardware product (i.e., buyers) and the application developers (i.e., sellers). The hardware product in the platform business model introduces three important issues that are not yet well understood in the literature of platform pricing: potentially downward-trending production cost, product quality improvements, and consumers' strategic behaviors. Using analytical modeling, our study explicitly factors in these issues in analyzing a monopoly platform owner's two-sided pricing problem. The platform sequentially introduces and prices quality-improving hardware products, for which the costliness of quality may decrease. …
A Model Of Competition Between Perpetual Software And Software As A Service, Zhiling Guo, Dan Ma
A Model Of Competition Between Perpetual Software And Software As A Service, Zhiling Guo, Dan Ma
Research Collection School Of Computing and Information Systems
Duplicate record, see https://ink.library.smu.edu.sg/sis_research/3744/. Software as a service (SaaS) has grown to be a significant segment of many software product markets. SaaS vendors, which charge customers based on use and continuously improve the quality of their products, have put competitive pressure on traditional perpetual software vendors, which charge a licensing fee and periodically upgrade the quality of their software. We develop an analytical model to study the competitive pricing strategies of an incumbent perpetual software vendor in the presence of a SaaS competitor. We find that, depending on both the SaaS quality improvement rate and the network effect, the …
A Model Of Competition Between Perpetual Software And Software As A Service, Zhiling Guo, Dan Ma
A Model Of Competition Between Perpetual Software And Software As A Service, Zhiling Guo, Dan Ma
Research Collection School Of Computing and Information Systems
Software as a service (SaaS) has grown to be a significant segment of many software product markets. SaaS vendors, which charge customers based on use and continuously improve the quality of their products, have put competitive pressure on traditional perpetual software vendors, which charge a licensing fee and periodically upgrade the quality of their software. We develop an analytical model to study the competitive pricing strategies of an incumbent perpetual software vendor in the presence of a SaaS competitor. We find that, depending on both the SaaS quality improvement rate and the network effect, the perpetual software vendor adopts one …
Endogenous Network Effects, Platform Pricing And Market Liquidity, Mei Lin, Ruhai Wu, Wen Zhou
Endogenous Network Effects, Platform Pricing And Market Liquidity, Mei Lin, Ruhai Wu, Wen Zhou
Research Collection School Of Computing and Information Systems
This paper examines a monopoly platform's two-sided pricing strategies in a setting with seller competition, which gives rise to not only positive cross-side network effects between buyers and sellers, but also a negative same-side network effect among sellers. We show that platform pricing depends crucially on the characteristics associated with market liquidity, which contrasts with the previous studies that point to the two sides' relative demand elasticities and/or network effects. A market is said to be more liquid when it has less friction, resulting in a larger total surplus for the platform economy and hence greater equilibrium entry on both …
Platform Pricing With Endogenous Network Effects, Mei Lin, Ruhai Wu, Wen Zhou
Platform Pricing With Endogenous Network Effects, Mei Lin, Ruhai Wu, Wen Zhou
Research Collection School Of Computing and Information Systems
This paper examines a monopoly platform’s two-sided pricing strategy through modeling the trades between the participating sellers and buyers. In this approach, the network effects emerge endogenously through the equilibrium trading strategies of the two sides. We show that platform pricing depends crucially on the characteristics associated with market liquidity, including both sides’ entry costs, the buyers’ preferences, and the distribution of the sellers’ quality. The platform may subsidize sellers if the market is sufficiently liquid, whereas buyer subsidy can be optimal given an illiquid market. We also illustrate the impact of the sellers’ quality heterogeneity on the platform’s optimal …
Technology Investment Decision-Making Under Uncertainty In Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma
Technology Investment Decision-Making Under Uncertainty In Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma
Research Collection School Of Computing and Information Systems
Innovations in the mobile payments industry provide potentially profitable investment opportunities for banks. Nonetheless, significant uncertainties are associated with decision-making for this IT investment context, regarding future market conditions, technology standards, and consumer and merchant responses, especially their willingness to adopt. As a result, traditional capital budgeting approach and experienced intuition have not been effective. We develop a model to support a bank’s mobile payment systems adoption decision-making at the firm level when it faces endogenous technological risks and exogenous market conditions. This study applies theory and modeling from financial economics for decision-making under uncertainty to investments in m-payment systems …
Technology Investment Decision-Making Under Uncertainty: The Case Of Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma
Technology Investment Decision-Making Under Uncertainty: The Case Of Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma
Research Collection School Of Computing and Information Systems
The recent launch of Google Wallet has brought the issue of technology solutions in mobile payments (m-payments) to the forefront. In deciding whether and when to adopt m-payments, senior managers in banks are concerned about uncertainties regarding future market conditions, technology standards, and consumer and merchant responses, especially their willingness to adopt. This study applies economic theory and modeling for decision-making under uncertainty to bank investments in m-payment systems technology. We assess the projected benefits and costs of investment as a continuous-time stochastic process to determine optimal investment timing. We find that the value of waiting to adopt jumps when …
Investment Timing For Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma
Investment Timing For Mobile Payment Systems, Robert J. Kauffman, Jun Liu, Dan Ma
Research Collection School Of Computing and Information Systems
The recent launch of Google Wallet has brought the issue of technology solutions in the mobile payment (m-payment) area to the forefront. In deciding whether and when to adopt m-payment technology, senior managers in banks are naturally concerned about uncertainties regarding future market conditions, technology standards, and consumer and merchant responses, especially their willingness to adopt. This study applies economic theory and modeling for decision-making under uncertainty to bank investments in mobile payment technology. We assess the projected benefits and costs of investment as a continuous-time stochastic process to determine optimal investment timing. We find that the value of waiting …