An overview of the analysis of e-commerce price wars based on game theory

Abstract

In the field of e-commerce, price wars have become a common means for firms to compete for market share. This paper takes price wars in e-commerce platforms as a background, and reviews the game theories used in them, as well as the ways in which firms adjust and optimize their pricing strategies in the context of dynamic competition. Based on the definitions of price wars e-commerce, sting models of static and dynamic games, the paper analyses the patterns of price wars and proposes suggested strategies for firms to cope with them, and illustrates the impact on market stability and firms’ long-term revenues. Finally, the paper discusses the impact of price wars on the long-term development of the industry, and puts forward corresponding policy recommendations and future plans, with the aim that through rational strategy optimization, enterprises can achieve sustainable competitive advantages and maximize their market performance in the midst of fierce price competition.