Journal Article

Optimal service versioning for dating platforms

Sun, Yonghong

2020

Overview

In this study, we examine the versioning strategy for two-sided dating platforms. We assume a monopoly dating platform facing two sides of users (male and female) with different levels of willingness to pay across and within the same side. The platform knows the user type distribution on each side but does not know the exact types of the individual users. The platform needs to decide whether or when to offer different versions of its services to the different types of users. The main findings are as follows: (1) the platform should always serve both types of users on each side; (2) the platform should choose to conduct versioning when the proportion of low-type users is small and/or their taste for quality is markedly different from that of high-type users, and choose not to do so otherwise; (3) when versioning is optimal, the platform should degrade the low-quality version as much as possible; and (4) versioning is never socially optimal. The necessary condition for versioning to improve social welfare is that high-type users benefit more from quality improvement than low-type users suffer from quality reduction.

• Publisher: Springer Nature B.V
• Subject: Information technology / Platforms / Prices / Quality of service