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Online advance selling or not: Pricing strategy of new product entry in a supply chain

Yawen Zhang, Bo Li, Xue Chen and Shuang Wu

Managerial and Decision Economics, 2020, vol. 41, issue 8, 1446-1461

Abstract: Considering consumers' strategic behavior and loss averseness of the deposit, this paper establishes a two‐period Stackelberg game model in a supply chain system, in which a manufacturer cooperates with an e‐retailer to perform advance selling to consumers. The optimal pricing decisions are obtained, and the impacts of the e‐retailer's advance selling activities on the profits of both parties are discussed. Studies have shown that advance selling activities always benefit the manufacturer, but they can hurt the e‐retailer. Within some specific conditions, the advance selling model can achieve Pareto improvement to both parties and benefit the performance of the supply chain.

Date: 2020
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