Advance Selling in the Presence of Speculators and Forward‐Looking Consumers

Lim, Wei Shi; Tang, Christopher S.

doi:10.1111/j.1937-5956.2012.01421.x

Cited by 59 publications

(31 citation statements)

References 38 publications

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“…Consumers' utilities are uncertain in the AS period because there is little information about the product at this time, and it is assumed that all consumers are homogeneous, and informed consumers have the same expected valuation for the product when it is time to pay the deposit (Cachon & Feldman, 2017; Lim & Tang, 2013; Zhao et al, 2016). Because the deposit will not be returned if a consumer regrets paying it, consumers might feel loss of the deposit.…”

Section: Basic Modelmentioning

confidence: 99%

Online advance selling or not: Pricing strategy of new product entry in a supply chain

Zhang

Xue

2020

Manage Decis Econ

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Considering consumers' strategic behavior and loss averseness of the deposit, this paper establishes a two‐period Stackelberg game model in a supply chain system, in which a manufacturer cooperates with an e‐retailer to perform advance selling to consumers. The optimal pricing decisions are obtained, and the impacts of the e‐retailer's advance selling activities on the profits of both parties are discussed. Studies have shown that advance selling activities always benefit the manufacturer, but they can hurt the e‐retailer. Within some specific conditions, the advance selling model can achieve Pareto improvement to both parties and benefit the performance of the supply chain.

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Section: Basic Modelmentioning

confidence: 99%

Online advance selling or not: Pricing strategy of new product entry in a supply chain

Zhang

Xue

2020

Manage Decis Econ

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“…Li et al [13] investigate the advance selling price strategies for oligopolists when considering the effect of product diffusion and the competitive market. Further, some researchers consider the fact that advance selling with price discrimination can lead to strategic consumer behavior, e.g., Fay and Xie [1]; Li and Zhang [3]; Lim and Tang [14]; Yu et al [15].…”

Section: Advance Selling: Improving Demand Forecasting Andmentioning

confidence: 99%

Advance Selling with Part Prepayment and Consumer Returns

Sun

Siqin

2018

Mathematical Problems in Engineering

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Part prepayment scheme can induce more consumers to purchase the product in advance but may also lead to the increase in consumer returns. This study develops a two-period theoretical model to examine the interaction between the part prepayment scheme and the return policy and its effect on the retailer’s profit. Our analysis yields the following insights. First, part prepayment scheme can help the retailer to increase the demand without sacrificing the advance selling price. Second, the prepayment proportion and the consumers’ hassle cost of return have a negative cross effect on the retailer’s profit, which indicates that when the consumers are allowed to preorder the product with a relatively low proportion of prepayment, the retailer should impose more restrictions to increase the consumers’ hassle cost of return. Third, the prepayment proportion and the ex-ante product information perceived by consumers also have a negative cross effect on the retailer’s profit, which indicates that the retailer should consider the degree of product information disclosure when adopting the part prepayment scheme. We also extend the model to incorporate the retailer’s handling cost of consumer returns and find that it is beneficial for the retailer to require a full prepayment when the handling cost is relatively high.

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“…Forward-looking consumers take future prices and valuations into consideration in making their decisions [44]. Sun et al [57] showed that excluding the forward-looking behavior leads to overestimation of promotion elasticity.…”

Section: Forward-looking Consumersmentioning

confidence: 99%

The effect of a temporary product distribution channel on supply chain performance

Khouja

Zhou

2016

Naval Research Logistics

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We analyze a supply chain of a manufacturer and two retailers, a permanent retailer who always stocks the manufacturer's product and an intermittent deal-of-the day retailer who sells the manufacturer's product online for a short time. We find that without a deal-of-the-day (DOTD) retailer, it is suboptimal for the manufacturer to offer a quantity discount while it is optimal for the retailer to offer periodic price discounts to consumers. With the addition of a DOTD retailer, it is likely to be optimal for the manufacturer to offer a quantity discount. We show that even without market expansion, i.e., no exclusive DOTD retailer consumers, opening the intermittent channel can leave the permanent retailer no worse-off while increasing the manufacturer's profit. We identify the regular and discounted wholesale prices and the threshold quantity at which the manufacturer should give the discount. We also identify the optimal retail prices. We find that opening the intermittent channel increases the profit of the manufacturer, is likely to decrease the average retail price and to increase sales, and may increase the permanent retailer's profit.

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Advance Selling in the Presence of Speculators and Forward‐Looking Consumers

Cited by 59 publications

References 38 publications

Online advance selling or not: Pricing strategy of new product entry in a supply chain

Online advance selling or not: Pricing strategy of new product entry in a supply chain

Advance Selling with Part Prepayment and Consumer Returns

The effect of a temporary product distribution channel on supply chain performance

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