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Newsvendor Pricing Problem in a Two‐Sided Market
Author(s) -
Chou Mabel C.,
Sim Chee Khian,
Teo ChungPiaw,
Zheng Huan
Publication year - 2012
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.2011.01235.x
Subject(s) - newsvendor model , interdependence , supply chain , software , two sided market , microeconomics , dynamic pricing , industrial organization , business , computer science , economics , marketing , network effect , political science , law , programming language
We study the pricing problem of a “platform” intermediary to jointly determine the selling price of the platforms (hardware) sold to consumers and the royalty charged to content developers for content (software), when the demands for content and for platforms are interdependent. Our model elucidates the impact of supply chain replenishment costs and demand uncertainty on the strategic issues of platform pricing in a two‐sided market.