How Online Reviews Interact with a Firm's Free Version Strategy

Cao, Huanhuan; Jiang, Jinhu; Geng, Xianjun

doi:10.1016/j.im.2022.103662

Cited by 5 publications

(1 citation statement)

References 36 publications

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“…Some scholars have also used game analysis to explore the impact of online reviews on firms' pricing decisions and profitability. For example, Kwark, et al constructed a game model consisting of two manufacturers and retailers, and found that the deviation of online reviews intensified the competition among manufacturers, which is not conducive to the manufacturer's profitability, but increases the retailer's profit [25] ; Cai, et al established a game model consisting of a single online retailer and three competing manufacturers, and found that only when the standard deviation of product quality shown by online reviews is large enough, online reviews can increase the profitability of the online retailer's capabilities [26] ; Cao, et al focused on the impact of online reviews on digital product companies' implementation of free version strategies [27] .…”

Section: Online Reviewsmentioning

confidence: 99%

Pricing Decision of E-Commerce Supply Chains with Return and Online Review of Product Quality

WANG,

DING,

CHENG

et al. 2023

系统科学与信息学报(英文)

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The online review function helps consumers grasp more real product information and reduce the possibility of returning, but it may also damage firms' reputations or profits. However, few studies considered the relationship between online reviews and consumer returns. Based on this, we develop an e-commerce supply chain (E-SC) game model consisting of a single manufacturer and a single e-platform, aiming to explore the relationship between consumer returns and online reviews and to analyze the impact on both the decision-making of E-SC members and their profits. We find that there is a negative relationship between consumer returns and online reviews of product quality, and consumer returns make the pricing decisions in the two scenarios of yes/no online reviews move toward two different directions. Only when the online review is positive and higher than a certain threshold will it have a positive impact on sales and E-SC members' profits. Finally, we design a new "commission joint returns and quality improvement costs sharing" contract to optimize the decentralized model with online reviews, and we find that the higher the accuracy of product information, the less conducive the contract applied to E-SC.

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Section: Online Reviewsmentioning

confidence: 99%

Pricing Decision of E-Commerce Supply Chains with Return and Online Review of Product Quality

WANG,

DING,

CHENG

et al. 2023

系统科学与信息学报(英文)

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Quality and pricing decisions for product upgrade: Does valuation uncertainty always hurt the vendor?

Guo,

Liu,

Cui

2024

Manage Decis Econ

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Product upgrade is an effective method for vendor to maintain and grow its market share. Consumers encounter difficulties in evaluating product utility or value because of product quality and misfit uncertainty. Considering valuation uncertainty, we study the vendor's upgrade strategy (including quality and pricing decisions) for repeat purchase products. The results show that the vendor can benefit from a decline in quality uncertainty. Misfit uncertainty impacts the vendor's profit nonmonotonically, depending on consumers' quality evaluation. As quality evaluation improves, the reduction in misfit uncertainty may hurt the vendor's profit. The results provide guidelines for vendor's product updates and upgrades.

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Economic role of online review filtering systems in the electronic marketplaces

Cao,

Wu,

2024

Inf Technol Manag

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How Online Reviews Interact with a Firm's Free Version Strategy

Cited by 5 publications

References 36 publications

Pricing Decision of E-Commerce Supply Chains with Return and Online Review of Product Quality

Pricing Decision of E-Commerce Supply Chains with Return and Online Review of Product Quality

Quality and pricing decisions for product upgrade: Does valuation uncertainty always hurt the vendor?

Economic role of online review filtering systems in the electronic marketplaces

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