Dynamic pricing and dual‐channel choice in the presence of strategic consumers

Abstract

This paper develops a dynamic pricing model to examine how strategic consumers affect the strategic interaction among firms under three dual‐channel formats, that is, direct selling dual‐channel, reselling dual‐channel, and agency selling dual‐channel. The results show that the retailer's selling prices display nonmonotonic relations to the acceptance of electronic channel. When strategic consumers have high patience, all firms prefer to decrease prices in both periods. The interaction of the acceptance of electronic channel and discount factor mediate the optimal mode choice for the firms. In most cases, the reselling dual‐channel and agency selling dual‐channel format are preferable for the retailer and the e‐retailer, respectively.

Dynamic pricing for group‐buying strategy with network externality

“…Second, when the discount factor becomes high, we demonstrate that the seller should reduce the price in Period 1 but increase it in Period 2. Contrary to previous works, such as Yu et al (2022) and Tian et al (2023), that consider retail price always decrease in the discount factor in both periods, our results present that if we consider the effect of the number of buyers in Period 1 on Period 2 (i.e., externality factor), the discount factor may cause the price to rise. In terms of the profit, we show that a higher discount factor leads the profit in Period 1 to first decrease and then increase, while leads the profit in Period 2 to first increase and then decrease.…”

“…He et al (2023) confirm that the strategic consumers may propel the dual-channel seller to commit to a preannounced pricing strategy instead of a dynamic pricing strategy. Yu et al (2022) hold the idea that strategic consumers with high-level patience may result in decreasing prices in both periods. Unlike the above literature, we consider the dynamic pricing strategy for a seller who adopts group buying in the presence of strategic consumers.…”

Retailers' information disclosure strategies with behavior‐based pricing in competitive supply chains

“…Wang et al (2021) study the effect of wholesale contracts and BBP in vertically differentiated competitive channels. Yu et al (2022) study a dynamic pricing model to explore the effects of strategic consumers. However, none of the above studies involve information disclosure.…”

Pricing decision making and coordination of a dual‐channel supply chain considering online reviews and channel preferences

“…However, Li and Mizuno (2022) proposed that dynamic pricing was more suitable for dual-channel supply chains. Because when consumers remain highly patient, adopting dynamic pricing can mitigate the conflict between the two channels (Yu et al, 2022). In addition to the level of e-commerce of a company can affect dual-channel pricing, the fungibility of channels can also affect a company's pricing strategy (Cao & Liu, 2021).…”