PLATFORM FORMATION FOR LOCAL SERVICES TRANSACTION

Abstract

 This paper discusses the function of a local service platform which enables matching between local potential enterprises and outside customers to realize transaction of local service in the market. The local service platform provides local potential entrepreneurs with consultant services which improve the contents of their service commodities to attach market values in response to the wants of the customers. The platform decides the range of the service types, each of which is characterized by a bundle of horizontally differentiated commodities (menus). A theoretical model is formulate to investigate how the platform determines the best combination of the range of service types and the variety of menus for the respective service types. The paper also analyzes the relationships between the optimal types of service commodities and the optimal fee for the usage of the platform.