Abstract: On bilateral platforms, the quality of the merchant is one of the key factors affecting the quality of the platform. Based on the fact that two-sided users of the platform have multiple transactions, using the number of transactions as a feature to distinguish the quality of merchants, a two-sided platform is examined where both edge merchants and core merchants exist at the same time, and a bilateral user utility model under the difference of merchant competitiveness established. The influence of transaction value-added rate and number of transactions on the evolution of the platform under the system equilibrium state is analyzed. The study finds that the increase in the number of transactions between the platform's bilateral users will increase the number of platform merchants and customers. Among them, the core merchants with more transactions have a faster growth rate than the edge merchants; when the merchants benefit more from the bilateral transactions relative to the users, the platform's pricing of core merchants is higher than that of edge merchants; when users benefit more from merchants, the platform subsidizes core merchants higher than that of edge merchants. Therefore, the platform should increase support for key merchants to promote the stable development of the platform. The conclusions of this study can provide a theoretical basis for the platform to formulate relevant management strategies.

Key words: bilateral platform, number of transactions, difference in competitiveness