Article ID Journal Published Year Pages File Type
5110531 Transportation Research Part E: Logistics and Transportation Review 2017 12 Pages PDF
Abstract
Nowadays many platforms emerge to provide delivery services by having independent shoppers to deliver groceries from independent retailers to consumers. To understand how to price this service, we formulate a two-sided platform's profit maximization problem by considering network externality. We focus on three pricing strategies, membership-based pricing, transaction-based pricing, and cross subsidization. When time discounting is absent and consumers' order frequency is price-insensitive, it is shown that these three strategies are equivalent. As membership-based pricing collects money the earliest and maximize price-sensitive order frequency, our analysis explains some platforms' promotion of it.
Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
Authors
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