Journal article
Integration of third-party platforms: Does it really hurt them?
International journal of production economics, v 234, 108003
Apr 2021
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
The fourth-party platform provides an alternative consumption channel that greatly saves transaction costs. As a new e-commerce phenomenon that appears more in the service industry, it integrates the original third-party platforms and is about to gain considerable development. This paper investigates whether it is favorable for a third-party platform to join the fourth-party platform. The best choice of third-party platform is discussed from three dimensions of profit, consumer surplus and social welfare. The Hotelling model and Pyramid Spatial model are established to describe the competition between different platforms and the choice of agents, and the Stackelberg game is constructed with commission rates as the decision variables. The main conclusions of this study include: i) the impact of commission rates is largely dependent on the business model of the third-party platform, such as the price of the service sold and whether it is consumer-oriented; ii) when the optimal commission rates are adopted by platforms, joining the fourth-party platform can bring greater profits to the consumer-oriented third-party platform and create greater consumer surplus and social welfare. This paper fills the gap of existing literature by providing decision support for the third-party platform under the vigorous development of the fourth-party platform.
•Study whether the third-party platform should join the fourth-party platform.•Hotelling model is extended to Pyramid Spatial model to discuss competition between multiple platforms.•Both providers and consumers make choices based on their own utilities.•Both provider- and consumer-oriented third-party platforms are discussed.•Service differentiation can alleviate users loss caused by platform integration.
Metrics
Details
- Title
- Integration of third-party platforms: Does it really hurt them?
- Creators
- Xiaoyang Zhou - Academy of Mathematics and Systems ScienceKexin Chen - Xidian UniversityHaoyu Wen - Xidian UniversityJun Lin - Xi'an Jiaotong UniversityKai Zhang - University of Shanghai for Science and TechnologyXin Tian - University of Chinese Academy of SciencesShouyang Wang - University of Chinese Academy of SciencesBenjamin Lev - Drexel University
- Publication Details
- International journal of production economics, v 234, 108003
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems)
- Web of Science ID
- WOS:000633039400001
- Scopus ID
- 2-s2.0-85099860999
- Other Identifier
- 991019168664904721
UN Sustainable Development Goals (SDGs)
This publication has contributed to the advancement of the following goals:
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Engineering, Industrial
- Engineering, Manufacturing
- Operations Research & Management Science