Analysis of pricing strategies for community-based group buying: The impact of competition and waiting cost
Yung-Ming Li (),
Jhih-Hua Jhang-Li,
Ting-Kai Hwang and
Ping-Wen Chen
Additional contact information
Yung-Ming Li: National Chiao Tung University
Jhih-Hua Jhang-Li: National Chiao Tung University
Ting-Kai Hwang: Ming Chuan University
Ping-Wen Chen: Southern Taiwan University
Information Systems Frontiers, 2012, vol. 14, issue 3, No 12, 633-645
Abstract:
Abstract Group buying is one of the major pricing mechanisms in which retailers can offer low group rates due to a saving on transaction costs and its target consumers are those with lower sensitivity on waiting time. Under group buying, group size significantly affects the waiting cost to which consumers have different tolerances. In this paper, we develop a two-stage pricing game to evaluate the impact of the waiting cost, competition, and group-facilitating technology on the profitability and efficiency of community-based group buying. Our results point out that when a monopolistic retailer operates a mixed channel, the retailer will charge a relatively high group rates in the group-buying channel to force most consumers to choose individual buying unless the transaction cost in the individual-buying channel is sufficiently high. If two competing retailers adopt different pure channels, investment in group-facilitating technology may weaken the profit of the retailer adopting community-based group buying when the actual selling-cost saving resulted from community-based group buying is not significant.
Keywords: Group buying; Channel competition; Waiting cost; IT investment (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)
Downloads: (external link)
http://link.springer.com/10.1007/s10796-010-9290-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
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:spr:infosf:v:14:y:2012:i:3:d:10.1007_s10796-010-9290-9
Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10796
DOI: 10.1007/s10796-010-9290-9
Access Statistics for this article
Information Systems Frontiers is currently edited by Ram Ramesh and Raghav Rao
More articles in Information Systems Frontiers from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().