A game theoretic strategic model for understanding the online-offline competition and fairness concern under community group buying

Wang, Ying; Song, Haohao

doi:10.3934/jimo.2022012

Cited by 11 publications

(6 citation statements)

References 58 publications

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“…In a supply chain setting, Tran and Desiraju (2016) analyzes the value of group purchasing provided by retailers to manufacturers and indicates that profit margins are significantly affected by market heterogeneity. Wang and Song (2023) investigate the group-buying activity and conclude that the online retailer is beneficial for social welfare which is impacted by investment conversion efficiency. Chen et al (2022) focus on information intensity that may contribute to the rush behavior of group buying.…”

Section: Literature Reviewmentioning

confidence: 99%

Dynamic pricing for group‐buying strategy with network externality

Hou,

Li,

Jin

et al. 2023

Manage Decis Econ

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We consider a two‐stage dynamic pricing problem for a seller who employs online group purchasing with strategic customers. Customers who arrive in Periods 1 and 2 can decide whether to purchase the product in the current period, delay their purchases to the next period (for those customers in Period 1), or leave the market. The network externality, a typical characteristic of group buying, is captured in our model. That is, more customers who purchase the product would positively or negatively affect the demand. We investigate the impacts of positive/negative externality on the seller's prices, demands, and profits, respectively. By comparing positive and negative externality cases, we find that customers who purchase the product in Period 2 can enjoy a lower price than in Period 1 for negative externality. Interestingly, however, the price in Period 1 might be higher or lower than in Period 2 for positive externality, even if the corresponding demand is lower. Compared to no externality, our result shows that the seller should reduce the price in Period 1 but increase it in Period 2 because this helps increase the total demand and profit in the presence of a positive externality. Nevertheless, when there exists a negative externality, we confirm that the prices in two periods might both decrease for a lower externality, which leads to lower total demand and profit for the seller. Since the seller can decide whether to disclose their reviews or product historical sales to customers, this result can provide practical implications for sellers who adopt a group purchasing strategy.

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Section: Literature Reviewmentioning

confidence: 99%

Dynamic pricing for group‐buying strategy with network externality

Hou,

Li,

Jin

et al. 2023

Manage Decis Econ

View full text Add to dashboard Cite

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“…In terms of fairness concerns, the emergence of community group buying has raised fairness concerns among other participating merchants. Wang and Song [14] thus construct a game model under three different scenarios, namely, initial state, fairness-neutral, and fairness-concerned, and the study shows that fairness-concerned has a very limited impact on the social welfare, affecting only the internal distribution of benefits.…”

Section: Development Trends Of Community Group Buyingmentioning

confidence: 99%

Research on Optimal Group-Purchase Threshold and Pricing Strategy of Community Group Purchase

Xu,

Chen

2023

Mathematics

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This study delves into the rapidly evolving community group-buying model, specifically focusing on the determination of optimal group-buying thresholds and pricing strategies for merchants. Aiming to bridge the gap in the existing literature, the methodology employs optimization models, integrating a numerical analysis to construct and evaluate a single merchant model. The findings reveal a nuanced relationship: within a specific threshold interval, a unique group-purchase threshold exists where merchants can maximize profits by balancing group and ordinary sales. The study shows that factors like ordinary selling price, group-buying publicity, and associated costs significantly influence these thresholds and pricing strategies. A critical insight is the threshold’s variability in response to market conditions, highlighting a strategic balance for maximizing profitability. The research underscores the need for merchants to adapt their strategies in response to evolving market dynamics and consumer behaviors. However, the study acknowledges its limitations due to its theoretical nature and focus on the Chinese market, suggesting the potential for future empirical studies in diverse cultural and economic contexts. Overall, this research contributes both theoretically and practically by providing a foundational framework for merchants to optimize group-purchase thresholds and pricing strategies in the dynamic realm of community group buying.

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“…To ensure the quality of fresh food and the profitability of merchants in community group buying, Shui and Li [16] designed a community group buying pricing model and a cold chain vehicle route planning model. Wang and Song [17] found that the emergence of community group buying caused concern about the fairness of businesses. They also found that online retailers would weaken the market position of offline sellers after entering the market.…”

Section: Online Group Buying Pricing Strategiesmentioning

confidence: 99%

Group Buying Pricing Strategies of O2O Restaurants in Meituan Considering Service Levels

Dai,

Ma,

Zhao

et al. 2023

Systems

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After the COVID-19 pandemic has subsided, the catering industry has returned to its previous thriving scene. Many restaurants have launched group buying services and collaborate with third-party online platforms to attract more customers. For the optimal decisions and maximum profits of restaurants and online platforms, a two-layer supply chain model is designed to investigate and study the price strategies and service strategies. Considering the service levels of restaurants and platforms, we construct the mathematical expressions of the offline retail model, online retail model, and online group buying model, respectively, and solve the game equilibrium. The results are shown as follows: (1) With cooperation between the restaurant and platform, both the restaurant and platform can obtain their maximum profits when they apply optimal pricing strategies. (2) The optimal pricing strategies of the restaurant are influenced by the sensitivity coefficients of customers to the restaurant and platform’s service levels, and the cost coefficients of the restaurant and platform’s service levels. (3) The maximum profit of the restaurant is directly proportional to the number of new potential consumers who are attracted. The more potential consumers who are attracted, the higher the profit the restaurant earns. The research results provide a reference for restaurants and platforms to formulate price strategies and service strategies, to help restaurants and platforms achieve more profits.

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A game theoretic strategic model for understanding the online-offline competition and fairness concern under community group buying

Cited by 11 publications

References 58 publications

Dynamic pricing for group‐buying strategy with network externality

Dynamic pricing for group‐buying strategy with network externality

Research on Optimal Group-Purchase Threshold and Pricing Strategy of Community Group Purchase

Group Buying Pricing Strategies of O2O Restaurants in Meituan Considering Service Levels

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