Information Disclosure and Pricing Policies for Sales of Network Goods

Hu, Ming; Wang, Zizhuo; Feng, Yinbo

doi:10.1287/opre.2019.1950

Cited by 38 publications

(15 citation statements)

References 43 publications

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“…Markopoulos and Hosanagar ( 2018 ) introduced a game theory model of the competitive market and found that the information availability of the third parties makes companies free-rider, especially low-quality enterprises, who can reduce investment more than high-quality enterprises in information disclosure. Hu et al ( 2020 ) studied a two-phase model, where the sales volume of the first phase is disclosed, based on which the customers of the second phase will make a purchasing decision. The above studies are all focused on disclosing information by the seller to the consumer, while, there are, of course, also studies by the consumer to the seller (Feri et al, 2016 ; Ichihashi, 2020 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Blockchain’s role in e-commerce sellers’ decision-making on information disclosure under competition

et al. 2022

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In e-commerce, sellers can disclose product information (such as quality, size information, function, and so on) to make consumers understand the products. However, in the process of information disclosure, consumers often fall into information distortion or information loss. Because of its immutability and traceability, blockchain can help e-commerce sellers improve information disclosure and ensure the efficiency of information transmission. We study a duopoly competitive e-commerce market in which two e-commerce sellers compete in information disclosure. According to whether to apply blockchain, we divide the sellers’ decision-making into four research scenarios (NN, BN, NB, BB). Based on the above four scenarios, we get the market demand of different products depending on the consumer utility, and further establish the game model in the competitive environment. This paper explores the impact of blockchain on information disclosure and consumer surplus, and achieves the Nash equilibrium of blockchain application for both sides. In the expansion model, we study e-commerce sellers’ risk aversion and capital constraints, and further explore their impact on blockchain in practice. Finally, combining with blockchain’s characteristics, we also analyze the impact of the application of blockchain at other aspects on the supply chain. We find that when consumers' trust in information is low or the cost of blockchain applications is low, all e-commerce sellers in competition will adopt blockchain. In addition, when consumers have low trust in information, it will be difficult to achieve complete equilibrium in the application of blockchain as their risk aversion increases. For capital constrained sellers, when the cost of blockchain application is low, it will be difficult to achieve full equilibrium for blockchain applicants as the bank financing rate increases.

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Section: Literature Reviewmentioning

confidence: 99%

Blockchain’s role in e-commerce sellers’ decision-making on information disclosure under competition

et al. 2022

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“…Another stream of related literature is group buying. Hu et al (2020) considered a positive network externality among customers in a general form, which includes group buying as a special case, and show that it may not be optimal for the firm to disclose the number of sign-ups.…”

Section: Literature Reviewmentioning

confidence: 99%

Mechanisms of cooperation between airlines and online travel agencies for flight crowdfunding

Ling

Bao

Zhang

et al. 2022

Int Trans Operational Res

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With the development of crowdfunding and e‐commerce, a novel selling strategy for airlines called flight crowdfunding has been recently applied to the airline industry. In this paper, we propose a micro‐foundation to analyze consumers' purchase behavior, the interaction between airlines and OTAs for launching crowdfunding flights and design contracts to coordinate the supply chain. We find that airlines tend to reduce the participation threshold below the break‐even point to attract more consumers, even if doing so will incur losses when the demand is insufficient. We also examine the conditions under which crowdfunding dominates the traditional selling and find that airlines will adopt crowdfunding as the selling strategy if the competition is sufficiently intense in the market or flights' fixed cost is sufficiently high. Moreover, all consumers always strictly benefit from the crowdfunding offer. Crowdfunding can create a win–win–win situation for airlines, the OTA and consumers if the number of airlines in the market is in an intermediate range. We also investigate the supply chain coordination contracts and demonstrate that cost‐sharing contracts can coordinate the supply chain and achieve its optimal performance, whereas some other contracts, such as wholesale‐price, revenue‐sharing, and profit‐sharing contracts cannot do that. This paper highlights the importance of crowdfunding in the cooperation between airlines and OTAs.

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“…For example, a pioneering study by Parakhonyak and Vikander [19] proves that to best exploit network effects, firms should release preorder and sales information to consumers for network goods. Hu et al [8] also studied the sales volume disclosure and pricing problems associated with network goods. e authors systematically analyzed the positive and negative effects of sales disclosure.…”

Section: Related Literaturementioning

confidence: 99%

“…Given the possible positive or negative effect of sales disclosure, we often observe in practice that some firms tend to commit to disclosing sales information, while others never release details. For example, Apple always releases iPhone and iPad sales volumes, but Amazon never announces the number of sales of Kindle products [8]. Recently, Huawei and Xiaomi, competitors in the 5G mobile phone market, successively released the sales quantities of their 5G mobile phones [9].…”

Section: Introductionmentioning

confidence: 99%

Sales Disclosure and Pricing Policies in the Presence of Social Learning

Rui

Yuan

2021

Mathematical Problems in Engineering

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This study analyzes the role of sales disclosure and social learning (SL) in firms’ optimal responsive pricing policies and profits. If sales quantities are disclosed, potential customers will increase (decrease) their willingness to pay for the product based on the observation of relatively high (low) sales. In a monopoly market, a firm can control initial sales through the initial price, thus influencing consumers’ SL outcomes. We find that disclosing sales quantities and enhancing SL are always beneficial for a firm in a monopoly context. With an increase in the intensity of SL, a monopoly firm has a higher incentive to decrease the initial price of a product to attract early buyers, which is beneficial for consumers. However, consumer surplus may decrease if consumers’ purchase intentions are strongly driven by historical sales quantities. In a duopoly market, learning based on historical sales quantities can encourage potential customers but intensify competition between firms. Thus, in a competitive market, sales disclosure and SL are only beneficial to firms when consumers’ intrinsic valuation of a product is relatively low. Otherwise, SL harms firms.

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Information Disclosure and Pricing Policies for Sales of Network Goods

Cited by 38 publications

References 43 publications

Blockchain’s role in e-commerce sellers’ decision-making on information disclosure under competition

Blockchain’s role in e-commerce sellers’ decision-making on information disclosure under competition

Mechanisms of cooperation between airlines and online travel agencies for flight crowdfunding

Sales Disclosure and Pricing Policies in the Presence of Social Learning

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