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Impacts of online consumer reviews on a dual-channel supply chain

Wenjuan Yang, Jiantong Zhang and Hong Yan

Omega, 2021, vol. 101, issue C

Abstract: This paper investigates the effects of online consumer reviews (OCRs) in a dual channel where the manufacturer distributes a product through a retail channel and an Internet channel. We develop game-theoretic models to capture both players’ pricing decisions and profits with OCRs, under two different channel structures. In specific, under the centralized channel, OCRs may increase or decrease the direct price but always lower the retail price. Under the decentralized channel, we show that the manufacturer has a higher probability to charge a higher direct price than under the centralized channel, and the retailer also has the chance to improve the retail price. Further, under the two channel settings, it is not necessarily wise for the manufacturer to provide OCRs in the Internet channel unless the information revealed by OCRs is sufficiently favorable.

Keywords: Dual channels; Online consumer reviews; Game theory; Supply chain management (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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DOI: 10.1016/j.omega.2020.102266

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