Inhibit violations in business-to-peer product sharing via heterogeneous punishment, firm decisions and subsidies

Yang Li, Hao Sun, Panfei Sun and Dongshuang Hou

European Journal of Operational Research, 2023, vol. 311, issue 3, 1173-1187

Abstract: Violations in business-to-peer (B2P) product sharing such as theft and vandalism may cause firm bankruptcy and social welfare reductions. Taking bike-sharing as an example, this paper develops a non-atomic game model to characterize the collective behaviors of rational consumers and investigates how to inhibit violations in the B2P market. We assume that individuals are heterogeneous in the expected punishment cost, and each individual can choose to be a compliant consumer, violating consumer, or a non-use consumer. The equilibrium results reveal that lowering the price and increasing the initial number of shared products can suppress violations, however, the firm profit is maximized when violators are reduced to a certain percentage, which diverges somewhat from social welfare. To further eliminate violations, the subsidy mechanism is introduced, which can efficiently reduce the ratio of violators while increasing both the firm profit and social welfare, even though the firm’s response to subsidy weakens its effect, and the increase in social welfare exceeds the investment in subsidies.

Keywords: Game theory; Business-to-peer market; Violation; Heterogeneous punishment; Firm decision (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221723004265
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:311:y:2023:i:3:p:1173-1187

DOI: 10.1016/j.ejor.2023.05.041

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().