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- Title
Firms' pricing strategies under different decision sequences in dual-format online retailing.
- Authors
Liu, Jinjin; Ke, Hua
- Abstract
E-commerce platforms are increasingly adopting a dual-format retailing mode, not only acting as a reseller, but also providing manufacturers a platform (i.e., marketplace) to access consumers. Based on platforms' offers, manufacturers can choose to operate either dual-format or single-format retailing. To figure out this problem, we first investigate channel selecting strategy for a manufacturer based on consumer value and further consider the impacts of power structure and pricing timing on firms' optimal pricing policies under dual-format retailing. Our findings suggest the manufacturer prefers to operate marketplace channel when utility discount factor is sufficiently high, while operate dual-format retailing channels when utility discount factor is moderate. An interesting observation is that more market power does not always create higher profit. Under some certain conditions, the e-commerce platform could obtain maximum profit when his rival is the leader, so does the manufacturer. In addition, we also explore leader's optimal pricing timing under different power structures. If the manufacturer is the leader, she should either let platform pricing early or set her own retail price early, depending on estimated utility discount and given platform fee. Being the leader, the e-commerce platform shouldn't set his retail price early in any case, which is consistent with "last mover" advantage.
- Subjects
IMPACT craters; MARKET power; BUSINESS enterprises; RETAIL industry; SEQUENCE spaces
- Publication
Soft Computing - A Fusion of Foundations, Methodologies & Applications, 2020, Vol 24, Issue 10, p7811
- ISSN
1432-7643
- Publication type
Article
- DOI
10.1007/s00500-019-04399-0