Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products

Pak Hou Che () and Yue Chen
Additional contact information
Pak Hou Che: School of Business, Macau University of Science and Technology, Macau 999078, China
Yue Chen: School of Business, Macau University of Science and Technology, Macau 999078, China

Mathematics, 2025, vol. 13, issue 12, 1-35

Abstract: Probabilistic selling is a retail strategy in which consumers purchase products without knowing their exact identities until after purchase, with various applications like gaming and retail; a real-world practice involves retailers may unsealing and reselling goods to meet consumer demand for transparency. This disrupts manufacturers’ strategies designed to adopt the uncertainty for segmentation and pricing. Using a vertically differentiated supply chain model structured as a Stackelberg game framework, this study examines how transparency from retailer unsealing affects profitability, consumer surplus, and market dynamics. Key findings include the following: (1) Unsealing increases retailer profits by aligning pricing with heterogeneous consumer willingness to pay. (2) Introducing a manufacturer’s direct channel reduces unsealing profits via price competition. (3) Unsealing creates conflicts between manufacturers’ design goals and retailers’ profit-driven incentives. By applying a Stackelberg game framework to model unsealing as a downstream transparency decision, this work advances the probabilistic selling literature by offering a structured approach to analyzing how downstream transparency and retailer strategies reshape probabilistic selling and supply chain dynamics. It highlights the need for manufacturers to balance segmentation, pricing, and channel control, offering insights into mitigating conflicts between design intentions and downstream market behaviors.

Keywords: probabilistic selling; vertical differentiation; retail management (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7390/13/12/2036/pdf (application/pdf)
https://www.mdpi.com/2227-7390/13/12/2036/ (text/html)

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:gam:jmathe:v:13:y:2025:i:12:p:2036-:d:1683111

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().