Consumer welfare and the strategic choice of price cap and leverage ratio

Sarkar, Sonali

doi:10.1016/j.qref.2015.06.004

Cited by 5 publications

(1 citation statement)

References 49 publications

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“…In particular, common customer benefits in the App SSC include shopping discounts for new users, free download of paid software for a limited time, timely software updates, etc. Consumer welfare is traditionally measured by consumers' surplus (Sarkar, 2016). Referring to the literature (Yu et al, 2018;Nagurney et al, 2019;Gui et al, 2019;Kotschedoff and Pachali, 2020), we construct the consumer welfare function as:…”

Section: Consumers' Welfare Functionmentioning

confidence: 99%

Optimal service quality and pricing for App service supply chain with network externality based on four different scenarios

Xing

Wang

Yao

2022

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PurposeThe paper aims to investigate the optimal service quality and pricing for a mobile application (App) service supply chain (SSC) and analyze the impact of network externality on App SSC members' utilities. After that, the corresponding management inspirations and suggestions are put forward.Design/methodology/approachThe paper developed a SSC consisted of an App service supplier and an App service operator. Our models aim to maximize the SSC members' utilities. By utilizing the game theory, equilibrium solutions are obtained. Numerical examples are used to manifest the impact of parameters on decisions by Matlab. Some management enlightenment could be obtained by comparison analysis.FindingsCooperating with an App service operator that asks for a lower revenue sharing ratio will enable the App service supplier to have sufficient funds to provide high-quality update service. With the increase of network externality, adopting a high-quality service strategy can bring higher utility to the App service operator and users. Pouring attention into consumer welfare moderately will improve the App service supplier's utility. Scenario CRS can achieve a win–win goal for App SSC members and consumers.Originality/valueThe innovations of this paper are as follows: Firstly, the authors investigate the optimal service quality and pricing for the App SSC, which has been discussed little in previous literature. Secondly, the authors discuss how network externality and enterprises' attention to consumer welfare affect the optimal decisions and utilities of App service supply chain members. Thirdly, this paper considers four different circumstances and determines the optimal operation scenario for App SSC through comparative analysis.

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