Effects of Platform Protection in a Duopoly in the Presence of Asymmetric Information and User Security Preference

30 Pages Posted: 13 Apr 2020

See all articles by Zhiyong Li

Zhiyong Li

State Key Laboratory of Media Convergence and Communication; School of Economics and Management, Communication University of China

Guofang Nan

Tianjin University - College of Management and Economics; Tianjin University

Minqiang Li

Tianjin University - College of Management and Economics

Date Written: March 18, 2020

Abstract

This study addresses the effects of platform protection and different information structures on equilibrium outcomes for competing superior and inferior two-sided platforms. The conditions under which the platform vendors, content providers, and users prefer to the higher platform protection are derived. When users are informed, the preferences of the inferior platform and its content providers depend on both the security effect and the change in user utility from content consumption. When users are uninformed, the impact of the security effect diminishes. Information disclosures might be detrimental to customer surplus and social welfare as the increasing of protection levels.

Keywords: Platform Protection, Pricing, Information, Security Preference

Suggested Citation

Li, Zhiyong and Nan, Guofang and Li, Minqiang, Effects of Platform Protection in a Duopoly in the Presence of Asymmetric Information and User Security Preference (March 18, 2020). Available at SSRN: https://ssrn.com/abstract=3556488 or http://dx.doi.org/10.2139/ssrn.3556488

Zhiyong Li (Contact Author)

State Key Laboratory of Media Convergence and Communication ( email )

No.1 Dingfuzhuang East Street Chaoyang District
Beijing, 100024
China

School of Economics and Management, Communication University of China ( email )

No.1 Dingfuzhuang East Street Chaoyang District
Beijing, 100024
China

Guofang Nan

Tianjin University - College of Management and Economics ( email )

NO.92 Weijin Road
Nankai District
Tianjin, 300072
China

Tianjin University ( email )

92, Weijin Road
Nankai District
Tianjin, Tianjin 300072
China

Minqiang Li

Tianjin University - College of Management and Economics ( email )

NO.92 Weijin Road
Nankai District
Tianjin, 300072
China

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