An extended Bass Model on consumer quantity of B2C commerce platforms

Li, Xiaoyü; Yuan, Jiahong; Yan, Shi; Wang, Tianteng; Hu, Xiangpei; Chan, Felix T.S.; Ruan, Junhu

doi:10.1007/s10660-020-09428-x

Cited by 4 publications

(4 citation statements)

References 56 publications

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“…Different from the traditional direct selling model, the network externalities have become an indispensable factor that affects the profitability of a firm in e-supply chain nodes during online product sales (Li et al, 2020b). Network externality, first introduced by Katz and Shapiro in 1985, suggests that the consumer utility highly correlates to the number of other users in the same network and increases with the total number of consumers who purchase similar or compatible products.…”

Section: Introduction 11 Backgroundmentioning

confidence: 99%

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Advertising and pricing of online direct selling considering network externalities

Shen

Fan

Wang

et al. 2022

IMDS

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PurposeConsidering the network externalities of online selling, this paper builds three different online direct selling models: manufacturer direct selling (MN model), network platform direct selling (NN model) and retailer direct selling (RN model). The optimal advertising and pricing decision and corporate profits under each selling model are investigated.Design/methodology/approachCombining the characteristics of online direct selling, this paper formulates direct selling models that are dominated by different companies as Stackelberg game models. Numerical analyses are carried out, along with the comparison of the equilibrium solutions for each model.FindingsThe authors' research shows that increasing network externalities is conducive to the development of enterprises. The network platform's profit is the lowest in the RN model and the highest in the NN one. The comparison of manufacturers' profits between the MN model and the NN model primarily depends on consumers' sensitivities for sales price and advertising promotion level. The manufacturer does not benefit from the RN model due to the lowest efficiency.Originality/valueCoupled with three different online direct selling models and detailed analyses of the optimal solutions, this study has enriched the theoretical foundation of online direct selling. Moreover, this study extends the research of network externalities to the field of e-commerce, revealing the network externalities' influence on the decision-making of the e-supply chain.

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Section: Introduction 11 Backgroundmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Advertising and pricing of online direct selling considering network externalities

Shen

Fan

Wang

et al. 2022

IMDS

View full text Add to dashboard Cite

show abstract

“…Gui and Gong (2016), among others, focused on business to customer (B2C) platforms, building a pricing model when a monopoly B2C platform provides a uniform quality and differentiated services. Guo et al (2018) and Li et al (2020) analysed the pricing, user scale and platform revenue of competitive B2C platforms from a multi-user ownership perspective.…”

Section: Review Of Bilateral Market Theory Modelsmentioning

confidence: 99%

Can price discrimination improve the performance of online retail platforms?

Liu

Anwar

2022

Australian Economic Papers

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Online retail platforms are the core of online retail activities, but due to increased competition among the platforms, traditional sources of revenue such as the membership and transaction fees alone cannot guarantee platform profitability. Thus, platform enterprises are looking for other sources of revenue. In this article, we focus on the role of value‐added services fees charged by platforms. Specifically, we show that price discrimination exercised by platform enterprises in value‐added services fees can increase the user access scale, platform profit as well as the social welfare.

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“…Due to this, the Bass model has been widely applied in economic market to quantitatively forecast the new product sales (Fan et al, 2017; Moe & Fader, 2002), product life cycle (Guo, 2014), 3G mobile subscription in China (Lim et al, 2012), Diffusion of Mobile Telephony in China (Liu et al, 2012), oil production in the Eagle Ford Shale (Tunstall, 2015), marketing innovations to old-age consumers (Pannhorst & Dost, 2019), wind power development factors (She et al, 2019), and so on. More recently, the Bass diffusion model was extended to describe the consumer quantity of B2C commerce platforms (Li et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Novel Optimization-Based Parameter Estimation Method for the Bass Diffusion Model

Liang

2021

Sage Open

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The Bass model is the most popular model for forecasting the diffusion process of a new product. However, the controlling parameters in it are unknown in practice and need to be determined in advance. Currently, the estimation of the controlling parameters has been approached by various techniques. In this case, a novel optimization-based parameter estimation (OPE) method for the Bass model is proposed in the theoretical framework of system dynamics ( SD). To do this, the SD model of the Bass differential equation is first established and then the corresponding optimization mathematical model is formulated by introducing the controlling parameters as design variable and the discrepancy of the adopter function to the reference value as objective function. Using the VENSIM software, the present SD optimization model is solved, and its effectiveness and accuracy are demonstrated by two examples: one involves the exact solution and another is related to the actual user diffusion problem from Chinese Mobile. The results show that the present OPE method can produce higher predicting accuracy of the controlling parameters than the nonlinear weighted least squares method and the genetic algorithms. Moreover, the reliability interval of the estimated parameters and the goodness of fitting of the optimal results are given as well to further demonstrate the accuracy of the present OPE method.

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An extended Bass Model on consumer quantity of B2C commerce platforms

Cited by 4 publications

References 56 publications

Advertising and pricing of online direct selling considering network externalities

Advertising and pricing of online direct selling considering network externalities

Can price discrimination improve the performance of online retail platforms?

Novel Optimization-Based Parameter Estimation Method for the Bass Diffusion Model

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