Joint price and quality decisions considering Chinese customers' variety seeking behavior

Niu, Baozhuang; Chen, Lei; Liu, Yaoqi; Jin, Yong

doi:10.1016/j.ijpe.2019.02.022

Cited by 26 publications

(12 citation statements)

References 30 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Unlike Sajeesh and Raju (2010), Niu, et al (2019) examined jointed pricing and quality decisions considering customers' variety-seeking behavior. They found that the existence of variety-seeking customers reduced firms' incentives to improve quality levels [21]. Our research is different from the above works in that we involved the service level decision with the pricing strategy between traditional products and sharing products.…”

Section: Variety-seeking Behaviormentioning

confidence: 90%

Pricing and Service Level Decisions under a Sharing Product and Consumers’ Variety-Seeking Behavior

2019

View full text Add to dashboard Cite

We developed a two-period duopoly model to show how consumers’ variety-seeking behavior affects the pricing and service level decisions of a traditional product and a sharing product. Our analysis revealed that, without considering the consumers’ variety-seeking behavior, the traditional product attracted consumers with a high level of service and high price, while the sharing product attracted consumers with a low level of service and low price. When we only considered variety-seeking behavior and did not adjust the service level, the product with the low level of service benefited from the consumers’ variety-seeking behavior, while the product with the high level of service lost profits. When we considered the variety-seeking behavior and adjusted the service level as well as the price, the sharing product was attractive to variety-seeking consumers and it gained a greater competitive advantage over the traditional product. For two periods, the number of variety-seeking consumers who switched from buying traditional products to buying sharing products was greater than those who switched from buying sharing products to buying traditional products. Furthermore, we found that when the consumers’ variety-seeking behavior was not obvious, the number of consumers shifting from the traditional product increased monotonically. In contrast, when the variety-seeking behavior was obvious, the number of consumers shifting from the traditional product decreased monotonically.

show abstract

Section: Variety-seeking Behaviormentioning

confidence: 90%

Pricing and Service Level Decisions under a Sharing Product and Consumers’ Variety-Seeking Behavior

2019

View full text Add to dashboard Cite

show abstract

“…Moreover, Lin and Kuo (2019) attached more emphasis to the impacts on the interaction between product temperature and its ambient temperature on product seeking behavior. Niu et al (2019) perceived the variety-seeking behavior of consumers led to the mild competition in the first stage and fierce competition in the second, while the existence of this behavior would weaken the motivation of enterprises to improve their quality levels. In this paper, Niu's study is a reference but what distinguishes our study from theirs lies in the fact that the operation scenario of CB and PT is taken as the research target.…”

Section: Literaturementioning

confidence: 99%

Operational strategy of customized bus considering customers’ variety seeking behavior and service level

Liu

Zhao

et al. 2021

International Journal of Production Economics

View full text Add to dashboard Cite

In recent years, customized bus (CB) is becoming an innovative model of the public transport system (PTS) in China. This service provides an advanced, timely, personalized, and flexible responses to the demand of the PTS, especially of commuters. Obviously, it could have an impact on public transport (PT) service. For instance, CB services influence the customers' variety-seeking behavior, which results in changes of customer options in different periods. Therefore, customers could be divided into different groups of preference. In this paper, we construct a two-period Hotelling game model by variety-seeking behavior and service level. The results show that, in the first stage, the departure frequency of CB and PT is influenced by variety-seeking behavior and service level. In the second stage, departure frequency is influenced by service level only. Next, although the departure frequency of bus impacts the changes of passenger ratios in different stages, service level appreciably impacts passenger number. From customer surplus and social welfare, we find that adjustment of service level can increase social welfare, which means that CB and PT will reach an optimum effect. The present work can provide a valuable reference to policymakers, practitioners, and others.

show abstract

“…Recent progress in behavioral economics shows the importance of incorporating various psychological insights into firms' decision models. Examples include consumers' "buying frenzy" behavior (DeGraba, 1995;Courty and Nasiry, 2016), fairness concerns (Cui et al, 2007;Nie and Du, 2017), reference effects (Kopalle et al, 1996;Zha et al, 2021;Zhao et al, 2021), consumers' contextdependent preferences (Chen and Turut, 2013), and consumers' variety-seeking behavior (Sajeesh and Raju, 2010;Niu et al, 2019). Among these insights, pricing strategies for conspicuous goods in the presence of the snob effect has received much scholarly attention since the seminal paper of Leibenstein (1950) who formally introduced the snob effect as a negative consumption externality by which product scarcity increases consumer utility.…”

Section: Pricing In the Presence Of Snob Effectmentioning

confidence: 99%

“…In other words, our contribution to the related literature is to theoretically clarify at which periods and how long firms should cause product shortages strategically in the presence of the snob effect. Because our motivating examples include both durable and nondurable goods, the durability of the good does not matter in our model, as in Gabszewicz and Garcia (2008), Hashimoto and Matsubayashi (2014), Zhou et al (2015), Liu et al (2018), Zha et al (2021), andNiu et al (2019). In addition, as our central focus is on analytically finding the optimal paths of price and sales quantity over more than two periods, we employ a simple deterministic setting with linear demand and cost, which is consistent with the models in most of the abovementioned studies on pricing strategies in the presence of the snob effect.…”

Section: General Multiple-period Pricing In the Presence Of Snob Effectmentioning

confidence: 99%

Dynamic production and pricing decisions in the presence of the snob effect

Sogo

Matsubayashi

2021

Int Trans Operational Res

View full text Add to dashboard Cite

This study analyzes the production and pricing strategy of a monopoly firm in the presence of the snob effect, whereby consumers value a product more when its availability is lower. Real-world firms often intentionally cause the snob effect by strategically reducing supply quantities or even causing shortages. This observation suggests the existence of a trade-off between utilizing the snob effect and avoiding opportunity costs. We consider a general multiperiod model in which a monopoly firm determines the dynamic paths of price and sales quantity; although consumers are not forward looking, they evaluate past stockouts with a discount factor. We find that the optimal dynamic paths of the price and output level vary depending on the degree of consumer sensitivity to stockouts, the consumer's discount factor on past shortage, and the firm's discount factor on future profit. Nevertheless, the total profit monotonically increases with the degree of consumer sensitivity to stockouts.

show abstract

Joint price and quality decisions considering Chinese customers' variety seeking behavior

Cited by 26 publications

References 30 publications

Pricing and Service Level Decisions under a Sharing Product and Consumers’ Variety-Seeking Behavior

Pricing and Service Level Decisions under a Sharing Product and Consumers’ Variety-Seeking Behavior

Operational strategy of customized bus considering customers’ variety seeking behavior and service level

Dynamic production and pricing decisions in the presence of the snob effect

Contact Info

Product

Resources

About