Pricing of application in two-sided markets

Abstract

The paper considers a two-sided market of mobile cross-platform applications. The most important elements of the market are identified. They comprise consumers of the first category who are simultaneously subscribers of a certain mobile communication operator; consumers of the second category that enter into agreements with platform manufacturers to obtain application development tools and mobile operators to ensure the operability of developed applications in the mobile operator networks; and platform-software or a mobile device in which applications can be used. The main distinction of the market under study is the interaction between the application producer and the consumer, which is always conducted not only using a certain platform but also through a certain mobile operator. The optimizing problem for the market equilibrium on the cross-platform applications market is formulated. The parametric pricing model on the two-sided mobile applications market is constructed. The pricing model takes into account the following factors: Average analog price; functionality indicators; the convenience of use; the ratio between supply and demand for the product is based on the number of existing analogs; fame and prestige of the manufacturer; the number of operating systems on which the use of applications is possible.