Two-level cooperation and competition strategies of government and technology service platforms: considering government subsidies
ISSN: 0368-492X
Article publication date: 14 July 2022
Issue publication date: 9 November 2023
Abstract
Purpose
The purpose of this paper is to analyze the optimal competition or cooperation decision between technology service platforms and governments in the context of fierce competition within urban agglomerations.
Design/methodology/approach
Based on the cooperation and competition game model, this study builds a two-level model for government and technology service platforms considering three cases: perfect competition, platform cooperation and government-led cooperation.
Findings
By analyzing the optimal strategies of the government and a platform in three cases, the research shows that choosing appropriate cooperation in a competitive situation is beneficial to both the government and the platform. Government-led cooperation is conducive to increasing social welfare. From the perspective of the platforms, if they actively seek cooperation, they can obtain higher subsidies and profits. The more intense the competition is, the higher the profits and social welfare generated from the platforms' active cooperation.
Practical implications
The contribution of this study relates to the development of technology service platforms in urban agglomerations. As local governments and platforms continuously undertake decision-making processes, this study constructs quantitative models to analyze the advantages and disadvantages of competition and cooperation. It is worth noting that relying on government subsidies to maintain the sustainable development of technology service platforms is not a long-term solution. Government subsidies play a vital role in the initial development of technology service platforms. The analysis results are in line with Guo et al. (2016), Jung and Feng (2020) and Li (2021) conclusions. Furthermore, long-term government subsidies will make platforms dependent on these subsidies. These are the contributions to the scientific literature.
Originality/value
Instead of focusing on vertical relationships, this study emphasizes the horizontal cooperation and competition relationship between platforms and local governments in an urban agglomeration. Thus, the vertical effects of government subsidies on platforms can be investigated. Another innovation is the social welfare policy goal, which is an important index for the development of urban agglomerations.
Keywords
Acknowledgements
Throughout the writing of this thesis the author has received a great deal of support and assistance. The author would first like to thank the author's supervisor, Professor Chen, whose expertise was invaluable in formulating the research questions and methodology. Professor Chen's insightful feedback pushed the author to sharpen thinking and bring the work to a higher level. The author would particularly like to acknowledge the teammate/group mate/team members, Dr. Yao and Dr. Wang, for wonderful collaboration and patient support. The author would also like to thank the author's tutors, for valuable guidance throughout the studies. The tutors provided the author with the tools that the author needed to choose the right direction and successfully complete the dissertation. Finally, the author would like to thank the author's parents for wise counsel and sympathetic ear. The author's parents are always there for the author.
Funding: This research was supported by the National key R&D plan of China (Grant No. 2018YFB1404303), and the Youth Fund of National Natural Science Foundation of China (Grant No. 72004174).
Ethics statement: The study was approved by Wuhan University of Technology.
Citation
Chen, D.-l., Fu, M., Yao, M.-D. and Wang, L. (2023), "Two-level cooperation and competition strategies of government and technology service platforms: considering government subsidies", Kybernetes, Vol. 52 No. 11, pp. 5119-5138. https://doi.org/10.1108/K-12-2021-1266
Publisher
:Emerald Publishing Limited
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