Pricing strategies of water rights trading platforms under weak marketization trends: evidence from China

Strengthening the water rights trading market is crucial for sustainable development. At present, water rights trading shows a weak marketization trend. This article analyzes the pricing strategy of a water rights trading platform in the water rights trading market, with the two-sided market theory as the core analytical framework. The Hotelling game model is used as the core analytical tool, and the article systematically analyzes the interaction mechanism between sellers and buyers on the platform. It also explores the impact of two-sided network externalities on the platform’s pricing behavior. We adopt MATLAB-based parameter analysis for numerical simulation. This simulation verifies the validity of the constructed pricing model based on the Hotelling game model. This research makes an innovative contribution by integrating the Hotelling game model with the theory of two-sided markets. The study shows that under the one-sided pricing model, the platform’s profit is positively correlated with the cross-network externality coefficient of the fee-paying party. As the intra-group network externality associated with the fee-paying party intensifies, the platform tends to reduce its optimal pricing for the fee-paying party. Furthermore, the platform’s optimal pricing strategy and core operational parameters under the two-sided fee-charging model exhibit non-monotonic relationships. Accordingly, expediting the construction of a two-sided market-oriented water rights trading platform will lay a solid foundation for implementing pricing regulation and attaining profit maximization goals. These findings provide targeted references for water resource managers and contribute to the sustainable development of China’s water rights trading market.ernality coefficient of the fee-paying party. As the intra-group network externality associated with the fee-paying party intensifies, the platform tends to reduce its optimal pricing for the fee-paying party. Furthermore, the platform’s optimal pricing strategy and core operational parameters under the two-sided fee-charging model exhibit non-monotonic relationships. Accordingly, expediting the construction of a two-sided market-oriented water rights trading platform will lay a solid foundation for implementing pricing regulation and attaining profit maximization goals. These findings provide targeted references for water resource managers and contribute to the sustainable development of China’s water rights trading market.