Topic: A Co-Opetitive Game Analysis of Platform Compatibility Strategies Under Add-on Services

Abstract: 

Large-scale platforms (LSPs) with valuation and awareness advantages have enabled competing small-scale platforms (SSPs) to be embedded in their platforms. This compatibility strategy creates a new channel, the compatible channel, through which customers can purchase services from an SSP via the LSP. Meanwhile, more platforms have been introducing add-on services to enhance their profitability. This study develops stylized game models to characterize the interaction between an LSP and an SSP, and explores their strategic and operational decisions on platform compatibility under add-on services. Our major research findings are as follows. First, we identify the conditions for platform compatibility: compatibility becomes an equilibrium strategy if the proportion of demand through the compatible channel falls within an intermediate range. Second, compatibility has opposite impacts on service pricing: At a low proportion of demand through the compatible channel, the two platforms engage in a price war; otherwise, they both raise prices. Finally, some model extensions further verify the robustness of the conclusions.

Speaker: Kevin W. Li

Date/Time: 15:00 – 18:00, 12 May, 2023

Place: Room 702, CEM Building 

Brief introduction of the speaker: 

Kevin W. Li is a professor of Odette School of Business, University of Windsor, Canada. He obtained a bachelor of science degree in control science and a Master's degree in Systems Engineering of Xiamen University in 1991 and 1994, and a PhD in Systems Design Engineering of University of Waterloo in 2003. He was funded by the Japan Society for the Promotion of Academic Progress (JSPS) Foreign Hired Researcher Program to conduct research visits to the Department of Value and Decision Science at Tokyo Institute of Technology in 2011 and 2015. His main research directions are logistics and supply chain management, decision-making theory and methods, conflict analysis. His research has received support from three Canadian Natural Science and Engineering Research Foundation (NSERC) Discovery Fund projects. Since 2001, he has published 67 high level articles in world-famous journals such as the European Journal of Operational Research, IEEE Transactions on Fuzzy Systems, IEEE Transactions on Systems, Man, and Cybernetics, Information Sciences, International Journal of Production Economics, International Journal of Production Research, Transportation Research. And his articles are widely cited by peers both domestically and internationally, including 2552 citations of SCI/SSCI journals, with an h index of 30. He is currently the deputy editor in chief of the SSCI journal Group Decision and Negotiation, as well as the editorial board of several other SCI/SSCI journals.