Research Article

Mathematical Optimization on Hybrid Channel Pricing Digital Products in Two-Sided Market with Network Effect

Table 1

Notations and definitions in current work.

NotationDefinition

The heterogeneous consumers
/The consumer who is indifferent between buying and not buying product from direct/platform channel
The consumer who is indifferent between adopting and not adopting platform service
/Features of the digital products/platform service
/Price in the direct/platform channel (decision variable)
/Profit in the direct/platform channel (objective function)
/Intensity of network externality in the direct/platform channel
/Installed base of the digital products in direct/platform channel
Installed base of the platform service
/Demand of the digital products in direct/platform channel
Demand of the platform service
/Learning cost of the consumers in adopting digital products/platform service