Dynamic Competition Strategy for Online Knowledge-Sharing Platforms

In the past decade, several knowledge-sharing websites, such as Yahoo Answers, Microsoft Live QnA, and Naver Knowledge In, have emerged. These websites offer members platforms to share their knowledge by asking and answering questions. As a result of knowledge sharing between members, knowledge-sharing websites have an accumulated knowledge database of answered questions that attracts people who have questions. This research asks how long the knowledge-sharing website, with the largest knowledge database and membership, can sustain a leading market position. To answer this question from a two-sided market perspective, this study investigates the competitive effect of accumulated knowledge, the complexity of questions, and the price structure of advertising dynamics on the long-term viability of a latecomer to an online knowledge-sharing market; we numerically solve an open-loop differential game in which two knowledge-sharing platforms compete. We show the longer the life span of accumulated knowledge, the higher the chance of survival of the latecomer. In addition, we show how the general complexity of questions asked and the price structure of advertising dynamics impact optimal membership fees.