 Digital coupon promotion and platform selection in the presence of delivery effortYuqing Jiang, Fan Liu and Andrew Lim Journal of Retailing and Consumer Services, 2021, vol. 62, issue C Abstract: In recent years, physical retailers have started selling products to consumers through either third-party or self-operated online platforms. Doing so, they face demand which depends on digital coupon promotions, delivery effort by the platform (i.e., deliver products from retailers to consumers), and channel preference. In this paper, we develop a game-theoretic model to examine the interactions between the physical retailer's distribution channel choices and coupon promotions. In normal operation, retailers prefer to pay lower fees to the third-party platform, but we find, counterintuitively, that when carrying on a digital coupon promotion, the retailer can be better off paying a higher participation fee to the third-party platform. We also identify the conditions under which the retailer prefers the third-party platform over the self-operated platform with and without coupon promotions. Furthermore, we show that digital coupon promotions and delivery effort boost the retailer's profits by price discriminating among consumers with differing purchase utilities. Keywords: Platform selection; Digital coupon; Delivery effort; Operating cost (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:62:y:2021:i:c:s0969698921001788 DOI: 10.1016/j.jretconser.2021.102612 Access Statistics for this article Journal of Retailing and Consumer Services is currently edited by Harry Timmermans More articles in Journal of Retailing and Consumer Services from Elsevier |
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