Firms’ introduction of internet-based installment: Incremental demand vs. cash opportunity cost

Niu, Baozhuang; Zeng, Fanzhuo; Liu, Yaoqi

doi:10.1016/j.tre.2021.102277

Cited by 24 publications

(4 citation statements)

References 43 publications

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“…Further, the application of after-pay is widely applied in various sectors, including marketing for everyday items (Schomburgk and Hoffmann, 2023), consumer transactions (Siemens, 2007;Niu et al, 2021;Tan, 2022;Aalders, 2023;Feng et al, 2023), supply chain (Yang and Chang, 2013;Khan et al, 2020), and financing credit (Kouvelis and Zhao, 2012). However, the specific implementation of after-pay needs to consider factors such as the application scenario, such as transaction type (Aalders, 2023), cultural background (Deufel et al, 2019), target audience (Feng et al, 2023), and affective states (Tan, 2022).…”

Section: Application Of After-paymentioning

confidence: 99%

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Pricing strategy of first-enjoy-after-pay service offered by two-sided media platforms

Zhang,

Zhang

2023

APJML

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PurposeThis study highlights the impact of mental accounts on a user's decision-making regarding payment schemes and aims to determine the pricing strategy for the first-enjoy-after-pay service offered by the two-sided media platforms.Design/methodology/approachThis study establishes a game-theoretic model and utilizes backward induction to derive the equilibrium price by maximizing the monopolist's profit.FindingsThe findings indicate that the conditions for a two-sided media platform to offer the first-enjoy-after-pay service depend on the trade-off between pleasure attenuation and pain buffering and the effect of time discounts. Moreover, the authors found that the time discount is a critical factor in determining pricing strategies under various payment schemes offered by the platform.Research limitations/implicationsThis work adopts a uniform pricing strategy for users who opt for either immediate or post-payment schemes. Nevertheless, it is important to note that this approach has limitations in terms of offering discriminatory pricing for those who choose both payment schemes.Practical implicationsThis analytical work provides valuable insights for two-sided media platforms to optimize their payment scheme strategies and pricing considering the influence of a user's mental account.Originality/valueIn a two-sided media platform, the authors provide applicable conditions for the platform to offer first-enjoy-after-pay service considering the effect of mental accounts. Further, the authors show the optimal pricing strategy under different payment schemes provided by the platform.

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Section: Application Of After-paymentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Pricing strategy of first-enjoy-after-pay service offered by two-sided media platforms

Zhang,

Zhang

2023

APJML

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“…Yan et al [17] examine the price competition in a dual-channel supply chain consisting of a capital-constrained supplier and an e-retailer providing finance, where the e-commerce platform can provide online distribution channels and online financing services. Niu et al [18] construct a chain-to-chain competition model consisting of a resale platform, an agency sales platform, and their exclusive suppliers to investigate whether the suppliers on the resale platform and agency sales platform volunteers provide installment payment services. Moreover, Huang [8] considers a dyadic supply chain with a giant and creditworthy buyer and a capital-constrained supplier.…”

Section: Relevant Literaturementioning

confidence: 99%

“…Therefore, firms that provide credit payment services must bear the cash opportunity cost. In our study, we used δ to represent the value discount of credit payment services [18].…”

Section: Assumption 2 the Consumer's Price Discount Of Credit Payment...mentioning

confidence: 99%

Enhancing Economic Sustainability with Credit Payment Services in a Dual-Channel Supply Chain

Huang

et al. 2022

Sustainability

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In the digital age, data-driven credit payment services play a significant role in constructing sustainable supply chains, which can stimulate consumption by reducing consumers’ cash pressure, thereby promoting a sustainable economic development. Our study investigates a dual-channel supply chain consisting of a supplier and a retailer, wherein the supplier ex-ante decides whether to implement the credit payment policy in the consumer market, and then the retailer determines whether to provide credit payment services in the reselling channel. We uncover that the supplier’s preference toward credit payment policy is not unidirectional. Specifically, the supplier establishes credit payment policy in the consumer market unless the discount of cash opportunity cost is lower than the price discount of credit payment services. Moreover, we find that, under credit payment policy of the supplier, the retailer opts to provide credit payment services when the discount of cash opportunity cost is higher than the price discount of credit payment services. Interestingly, our results demonstrate that, compared with non-credit payment policy, credit payment policy may restrict the development of economics sustainability, which undermines the whole supply chain.

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To Share or Not? Hybrid e‐Commerce Platform's Provision and Sharing Strategies of Consumer Credit Service

Feng,

Zhang,

Yao

et al. 2024

Manage Decis Econ

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As a new financial innovation, consumer credit services are increasingly embraced by e‐commerce platforms. This paper presents a stylized model to determine when an e‐commerce platform should launch credit services and whether to share them with third‐party sellers. Our findings indicate that the platform benefits from launching credit services only when consumer preference outweighs the delinquency rate. Furthermore, service sharing can create a win‐win scenario with moderate fees and high consumer preference. Contrary to common belief, sharing services with sellers can reduce consumer surplus, suggesting that widespread use of consumer credit services is not necessarily beneficial for consumers.

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Firms’ introduction of internet-based installment: Incremental demand vs. cash opportunity cost

Cited by 24 publications

References 43 publications

Pricing strategy of first-enjoy-after-pay service offered by two-sided media platforms

Pricing strategy of first-enjoy-after-pay service offered by two-sided media platforms

Enhancing Economic Sustainability with Credit Payment Services in a Dual-Channel Supply Chain

To Share or Not? Hybrid e‐Commerce Platform's Provision and Sharing Strategies of Consumer Credit Service

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