Channel Management for Digital Products in the Two-sided Market with Network Externality Effects

<div>(a) Impact of <svg height="9.49473pt" id="M126" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -9.28833 7.30254 9.49473" width="7.30254pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M529 97L508 118C475 75 449 58 438 58C428 58 421 66 415 104C393 234 374 403 364 496C345 670 307 712 254 712C220 712 174 691 153 669L161 645C176 653 194 658 206 658C237 658 261 640 278 562C287 522 290 483 293 434C223 269 110 105 23 9L32 -12C59 -6 85 0 108 7C152 64 251 252 300 366C307 297 315 221 337 82C346 24 363 -12 393 -12C425 -12 475 13 529 97Z"></path></g></svg> in the direct channel (<svg height="6.1673pt" id="M127" style="vertical-align:-0.2063904pt" version="1.1" viewbox="-0.0498162 -5.96091 4.9929 6.1673" width="4.9929pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M352 391C352 416 319 448 267 448C236 448 173 423 147 400C107 364 96 332 96 304C96 248 143 210 193 181C241 153 258 124 258 100C258 72 232 38 184 38C151 38 107 66 81 108C77 114 64 116 55 111C34 99 23 84 23 65C23 29 81 -12 134 -12C220 -12 325 61 325 141C325 184 297 215 234 256C194 282 161 309 161 346C161 380 188 401 217 401C255 401 279 380 301 353C308 344 313 341 325 347C341 355 352 371 352 391Z"></path></g></svg> = 0.5, <svg height="12.1266pt" id="M128" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -11.9202 11.3825 12.1266" width="11.3825pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M352 391C352 416 319 448 267 448C236 448 173 423 147 400C107 364 96 332 96 304C96 248 143 210 193 181C241 153 258 124 258 100C258 72 232 38 184 38C151 38 107 66 81 108C77 114 64 116 55 111C34 99 23 84 23 65C23 29 81 -12 134 -12C220 -12 325 61 325 141C325 184 297 215 234 256C194 282 161 309 161 346C161 380 188 401 217 401C255 401 279 380 301 353C308 344 313 341 325 347C341 355 352 371 352 391Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,4.875,-5.741)"><path d="M655 676H628C608 656 600 650 571 650H156C118 650 114 651 102 676H77C63 615 45 548 24 485L60 486C81 531 97 562 114 580C134 603 148 611 252 611H308L217 127C201 41 196 38 105 32L98 0H384L393 32C300 38 288 41 304 127L393 611H466C553 611 571 604 582 580C592 559 597 530 595 485L630 489C636 548 645 624 655 676Z"></path></g></svg> = 1, <svg height="6.1673pt" id="M129" style="vertical-align:-0.2063904pt" version="1.1" viewbox="-0.0498162 -5.96091 5.39742 6.1673" width="5.39742pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M383 397C383 424 344 448 299 448C244 448 172 409 132 375C66 319 23 227 23 146C23 42 74 -12 146 -12C208 -12 298 30 359 103L343 124C315 95 248 48 192 48C145 48 111 85 111 163C111 228 129 294 151 330C171 363 201 401 241 401C275 401 302 384 325 356C332 347 339 344 348 348C373 360 383 381 383 397Z"></path></g></svg> = 0.2, and <svg height="12.1266pt" id="M130" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -11.9202 11.787 12.1266" width="11.787pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M383 397C383 424 344 448 299 448C244 448 172 409 132 375C66 319 23 227 23 146C23 42 74 -12 146 -12C208 -12 298 30 359 103L343 124C315 95 248 48 192 48C145 48 111 85 111 163C111 228 129 294 151 330C171 363 201 401 241 401C275 401 302 384 325 356C332 347 339 344 348 348C373 360 383 381 383 397Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,5.282,-5.741)"><path d="M655 676H628C608 656 600 650 571 650H156C118 650 114 651 102 676H77C63 615 45 548 24 485L60 486C81 531 97 562 114 580C134 603 148 611 252 611H308L217 127C201 41 196 38 105 32L98 0H384L393 32C300 38 288 41 304 127L393 611H466C553 611 571 604 582 580C592 559 597 530 595 485L630 489C636 548 645 624 655 676Z"></path></g></svg> = 0.5). (b) Impact of <svg height="12.1266pt" id="M131" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -11.9202 13.6922 12.1266" width="13.6922pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M529 97L508 118C475 75 449 58 438 58C428 58 421 66 415 104C393 234 374 403 364 496C345 670 307 712 254 712C220 712 174 691 153 669L161 645C176 653 194 658 206 658C237 658 261 640 278 562C287 522 290 483 293 434C223 269 110 105 23 9L32 -12C59 -6 85 0 108 7C152 64 251 252 300 366C307 297 315 221 337 82C346 24 363 -12 393 -12C425 -12 475 13 529 97Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,7.174,-5.741)"><path d="M655 676H628C608 656 600 650 571 650H156C118 650 114 651 102 676H77C63 615 45 548 24 485L60 486C81 531 97 562 114 580C134 603 148 611 252 611H308L217 127C201 41 196 38 105 32L98 0H384L393 32C300 38 288 41 304 127L393 611H466C553 611 571 604 582 580C592 559 597 530 595 485L630 489C636 548 645 624 655 676Z"></path></g></svg> in the platform channel (<svg height="6.1673pt" id="M132" style="vertical-align:-0.2063904pt" version="1.1" viewbox="-0.0498162 -5.96091 4.9929 6.1673" width="4.9929pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M352 391C352 416 319 448 267 448C236 448 173 423 147 400C107 364 96 332 96 304C96 248 143 210 193 181C241 153 258 124 258 100C258 72 232 38 184 38C151 38 107 66 81 108C77 114 64 116 55 111C34 99 23 84 23 65C23 29 81 -12 134 -12C220 -12 325 61 325 141C325 184 297 215 234 256C194 282 161 309 161 346C161 380 188 401 217 401C255 401 279 380 301 353C308 344 313 341 325 347C341 355 352 371 352 391Z"></path></g></svg> = 0.5, <svg height="12.1266pt" id="M133" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -11.9202 11.3825 12.1266" width="11.3825pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M352 391C352 416 319 448 267 448C236 448 173 423 147 400C107 364 96 332 96 304C96 248 143 210 193 181C241 153 258 124 258 100C258 72 232 38 184 38C151 38 107 66 81 108C77 114 64 116 55 111C34 99 23 84 23 65C23 29 81 -12 134 -12C220 -12 325 61 325 141C325 184 297 215 234 256C194 282 161 309 161 346C161 380 188 401 217 401C255 401 279 380 301 353C308 344 313 341 325 347C341 355 352 371 352 391Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,4.875,-5.741)"><path d="M655 676H628C608 656 600 650 571 650H156C118 650 114 651 102 676H77C63 615 45 548 24 485L60 486C81 531 97 562 114 580C134 603 148 611 252 611H308L217 127C201 41 196 38 105 32L98 0H384L393 32C300 38 288 41 304 127L393 611H466C553 611 571 604 582 580C592 559 597 530 595 485L630 489C636 548 645 624 655 676Z"></path></g></svg> = 1, <svg height="6.1673pt" id="M134" style="vertical-align:-0.2063904pt" version="1.1" viewbox="-0.0498162 -5.96091 5.39742 6.1673" width="5.39742pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M383 397C383 424 344 448 299 448C244 448 172 409 132 375C66 319 23 227 23 146C23 42 74 -12 146 -12C208 -12 298 30 359 103L343 124C315 95 248 48 192 48C145 48 111 85 111 163C111 228 129 294 151 330C171 363 201 401 241 401C275 401 302 384 325 356C332 347 339 344 348 348C373 360 383 381 383 397Z"></path></g></svg> = 0.2, and <svg height="12.1266pt" id="M135" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -11.9202 11.787 12.1266" width="11.787pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M383 397C383 424 344 448 299 448C244 448 172 409 132 375C66 319 23 227 23 146C23 42 74 -12 146 -12C208 -12 298 30 359 103L343 124C315 95 248 48 192 48C145 48 111 85 111 163C111 228 129 294 151 330C171 363 201 401 241 401C275 401 302 384 325 356C332 347 339 344 348 348C373 360 383 381 383 397Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,5.282,-5.741)"><path d="M655 676H628C608 656 600 650 571 650H156C118 650 114 651 102 676H77C63 615 45 548 24 485L60 486C81 531 97 562 114 580C134 603 148 611 252 611H308L217 127C201 41 196 38 105 32L98 0H384L393 32C300 38 288 41 304 127L393 611H466C553 611 571 604 582 580C592 559 597 530 595 485L630 489C636 548 645 624 655 676Z"></path></g></svg> = 0.5).</div>

Discrete Dynamics in Nature and Society

fig4

Figure 4

Figure 4: Channel Management for Digital Products in the Two-sided Market with Network Externality Effects 