Online Healthcare Platform Evolution: The Interplay of Bargaining and Network Effects

Seminar abstract

Healthcare needs have been growing rapidly in many countries as populations age.

Recently, ecosystems with online platforms at their centre have emerged to address this need. This is because these platforms can scale rapidly, increasing healthcare access and equity.

The speed of scaling depends on the network effects across healthcare providers and consumers on the platform. The network effects also impact the bargained prices for healthcare providers, which in turn impact the platform's profits and growth rate.

We develop a novel framework that combines theories of network effects and bargaining to examine the evolution of online healthcare platforms as they balance the conflicting objectives of growth and profitability.

We apply our framework to data from a major Chinese online healthcare platform that links hospitals and consumers for preventive health exams.

Our results show that hospitals that provide a stronger (weaker) inducement to consumers to join the platform, i.e., exhibit higher (lower) cross-network effects, extract more (less) economic value from the platform.

Using a series of simulations, we provide insights for the platform in terms of resource allocation to balance growth and profitability. Consumers participating in this ecosystem also see a monetary benefit equivalent to two hours of minimum wages. 

How to attend this seminar

This seminar is free to attend with no need to register in advance.

We welcome you to join this seminar online on Wednesday 1 December 2021 at 1pm

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Speaker bio

Dr Xu Zhang is an Assistant Professor at London Business School.

Her research focuses on examining business strategies and understanding consumer behaviour in a variety of digital platform markets, including;

• e-commerce markets
• freelancer markets
• online travel markets
• healthcare markets

In particular, she investigates how different marketing strategies and market mechanisms affect market efficiency, business profits and social welfare.

Her work has been published in top-tier journals such as Marketing Science and Journal of Economics & Management Strategy.