Platform Discount Deciding, Seller Pricing and Advertising Investment in the Shopping Festival Based on Two-Sided Market Theory

The online shopping platform, known as a two-sided market with buyers and sellers, always sponsor a Shopping Festival, such as Amazon “Black Friday”, Taobao “Double 11”. In this paper, a Stackelberg game model is constructed to study the platform discount deciding, seller pricing and advertising investment in the Shopping Festival. The research results show that (1) the optimal discount of the platform is related to the product buyer utility and unit cost. The higher the buyer utility of the product is, the larger the optimal discount coefficient of the platform is. The higher the unit cost of the product is, the larger the optimal discount coefficient for the platform is. (2) The platform profit increases in the number of buyers and the buyer utility of the product, and the profit increases in the platform transaction rate and the advertising cost coefficient firstly and then remains unchanged. (3) When the discount is more, seller’s optimal pricing remains unchanged, and the advertising investment level reduce with the decrease of the platform discount coefficient. When discount is less, seller’s optimal product pricing decreases in the decrease of the discount coefficient, but the advertising investment level remains unchanged.