Equilibrium Pricing Strategies under Domestic and Cross-Country Competition: A Model of Online Educational Platforms

The COVID-19 pandemic has affected the development of online services that are based on online platforms. Technological development has enabled not only goods but also services such as education to enter the platform economy market. However, few studies have explored the competition between online educational platforms between each other. The purpose of this paper is to identify the differences in the competition between online educational platforms at the global and country levels. With this aim in mind, I build a game-theoretic model of competition between global and local platforms with the focus on the price and quality of courses. The model targets consumers with different levels of foreign language proficiency. As a result of the equilibrium strategy analysis, I have found that a global platform attracts more prestigious universities and sets higher prices for their courses. Meanwhile, the course quality is enhanced if the platforms give a share of the revenue to the universities creating the courses. These results might come useful for educational platforms in selecting optimal prices and costs.