Abstract: Aiming at two competitive third-party manufacturing platforms that offer parts trading service to manufacturers and suppliers, this paper considers the positive cross-network effects between bilateral users and the negative intra-group network effects within each user group. A Hotelling model is constructed to study the optimal service and pricing strategy of the platforms when manufacturers and suppliers are multihoming. The impacts of intra-group network effects on the optimal decision of platforms are further analyzed. The results show that, when the basic utility that platforms offer to users is high, the two platforms should adopt differentiated service strategy. In this case, platforms always charge more for suppliers, while it's possible to give some subsidies to manufactures. However, when the basic utility that platforms offer to users is low, the two platforms should implement homogeneous service strategy. At this time, platforms no longer give subsidies to manufacturers, and under certain conditions, the platforms will charge more for manufacturers even though manufactures' cross-network effect intensity is greater than suppliers'.

Key words: third-party manufacturing platform, intra-group network effects, multihoming, service, pricing strategy