[2022-04] Strategies for the Chicken-and-Egg Problem in Two-Sided Markets
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날짜 2022.09.11
조회수 754
[2022-04] Strategies for the Chicken-and-Egg Problem in Two-Sided Markets Yohan Kim Moon Soul Graduate School of Future Strategy, KAIST Minyoung Choi Center for Digital Humanities & Computational Social Sciences, KAIST Jae-Suk Yang Moon Soul Graduate School of Future Strategy, KAIST Abstract The chicken-and-egg problem is a well-known challenge faced by platform providers. Numerous strategies to address this challenge for specific businesses have been suggested. We focus on the chicken-and-egg problem and possible solutions in a single model from a general perspective, looking beyond previously suggested solutions to specific businesses. Our computational models represent individual platform users and the results demonstrate various appropriate and cost-effective subsidy strategies in various platform markets. First, we establish a useful single model for the chicken-and-egg problem and its solution. Second, we identify a chicken-and-egg zone in which the success or failure of a platform is determined according to the network effects. Finally, by considering both cross-network and direct network effects, we show that cost imposition and subsidy strategies may solve the chicken-and-egg problem in almost any platform market situation. Moreover, the numerical results provided by the model enable comprehensive examination of appropriate cost imposition and subsidy strategies to launch platforms successfully under various market conditions. Keywords Two-sided markets, platform business, platform, network effect, agent-based modeling, chicken and egg problem
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