Intertemporal Price Competition in the Two-Sided Market: Reexamining the Seesaw Principle for Startup Platforms
通过博弈模型研究初创平台在多期定价中是否应沿用静态的跷跷板原则，发现平台保留率越高，跨期价格调整越大；面临财务压力的初创平台应对利润较低的一侧收取更高价格以避开价格战。
Pricing represents a crucial element in the platform business model search, particularly for startups that face the “cold-start” problem in launching a two-sided marketplace. In a static setting, the literature recommends the “seesaw principle” (i.e., charging a relatively low price, even subsidizing, on the one side and a high price on the other) as the solution. However, little is known about whether the seesaw principle still works in a dynamic setting and how it is influenced by intertemporal factors such as retention capabilities and early period financial pressure. This paper develops a game-theoretic model to examine optimal pricing strategies in a multiperiod setting. We first show that, in the symmetric scenario, the adjustment to the seesaw principle (i.e., the difference between the single- and multiperiod price gaps) increases with the platforms’ retention rate. This insight holds true in the asymmetric case where a startup platform faces greater early period financial pressure than an established competitor. Interestingly, the startup platform should charge a higher price to the less profitable side to differentiate itself and avoid a price war. We also explore the robustness of these insights by considering an endogenous, price-sensitive retention rate.