Financing the capital-constrained online retailer with risk aversion: coordinating strategy analysis

Abstract

This paper considers a capital-constrained online retailer (OR) selling products through an e-commerce platform (EP) who also offers financial services to retailers. During the selling season, the OR exerts an effort to promote market demand through activities like sales promotions, advertising and live-streaming selling events. To investigate the EP-based financing scheme, a game-theoretic model is developed where the EP functions as the leader determining the interest rate and platform usage fee rate, and the OR functions as the follower determining the order quantity and effort level. We explore the impacts of the OR’s risk-aversion and find that when the OR is risk-averse (1) she sets a high effort level, and the EP sets a high usage fee rate; (2) a high risk-averse OR orders less products than low risk-averse OR. We design specific revenue-cost sharing contracts to coordinate the supply chain and demonstrate that the designed contracts are feasible. Moreover, we find that the OR consistently prefers EP financing compared to bank financing.

Retailer service strategy on livestreaming platforms considering free riding behavior

“…Regarding how to implement livestreaming service efficiently, Ha et al (2021) analyze the optimal choice among three possible channel structures of an online intermediary that exerts service effort through live streams. Tao et al (2022) study the financing scheme between a capital-constrained online retailer and an e-commerce platform in the context of livestreaming selling events. However, none of these studies explore the service strategy for multiple products on a livestreaming channel.…”

“…In reality, firms may not be able to provide livestreaming services for all products due to budgetary constraints or time limitations. For example, when firms engage Internet celebrities or influencers such as Austin Li and Viya to promote their products, most smalland medium-sized enterprises can only afford the fees charged by the streamers for a portion of products (Tao et al, 2022;Wang et al, 2022a). Meanwhile, the livestreaming shows hosted by these famous streamers usually last between 2 and 3 h, and these streamers cannot promote all products for firms in a short period (Wang et al, 2022a).…”

Agricultural Supply Chain Financing Strategies under the Impact of Risk Attitudes

“…To evaluate dynamic credit lines and provide timely and efficient financing services for supply chain members, Cai et al compared and analyzed the optimal decision-making and profit of each member of the supply chain under the traditional financing model and e-commerce financing model, emphasizing that the online supply chain financing strategy is more conducive to improving business efficiency [21][22][23][24]. Furthermore, Tao et al found that supply chain finance can effectively reduce the cost in the supply chain and improve the efficiency of the supply chain through the use of digital applications and technologies such as e-commerce platforms and the Internet of Things [25]. From the perspective of development trends, an e-commerce financing strategy will become an important driving force for solving agricultural financing problems and aiding agricultural revitalization.…”