Equilibrium Pricing, Advertising, and Quality Strategies in a Platform Service Supply Chain

Yong He, Yanan Yu (), Zhongyuan Wang () and Henry Xu ()
Additional contact information
Yong He: School of Economics and Management, Southeast University, Nanjing 210096, P. R. China
Yanan Yu: School of Economics and Management, Southeast University, Nanjing 210096, P. R. China
Zhongyuan Wang: School of Economics and Management, Southeast University, Nanjing 210096, P. R. China
Henry Xu: UQ Business School, The University of Queensland, Brisbane, QLD 4072, Australia

Asia-Pacific Journal of Operational Research (APJOR), 2022, vol. 39, issue 01, 1-33

Abstract: Online-to-Offline service platforms are rising with the development of e-commerce and the increasing need for service. Taking the hospitality and tourism industries as typical examples, this paper considers a platform service supply chain, where a leading hotel is responsible for offline service, and a following platform is in charge of pricing, online service, and advertising investment. Three decision modes (i.e., decentralized, cost-sharing, and integrated) for the platform service supply chain are investigated. We derive the optimal service levels for the hotel and the platform, advertising investment, and retail price in each mode. Our analyses indicate that perceived service quality and brand image vary over time, and they gradually converge to a steady-state. The cost-sharing mode can be achieved if the hotel can obtain enough profit per unit. Once the cost-sharing mode is achieved, it can help improve perceived service quality and brand image, which further increases both the hotel and the platform’s profits. However, the integrated mode generates the best-perceived service quality, brand image, supply chain performance, and the lowest price.

Keywords: Pricing; advertising; quality strategy; platform service supply chain (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217595921400315
Access to full text is restricted to subscribers

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:wsi:apjorx:v:39:y:2022:i:01:n:s0217595921400315

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217595921400315

Access Statistics for this article

Asia-Pacific Journal of Operational Research (APJOR) is currently edited by Gongyun Zhao

More articles in Asia-Pacific Journal of Operational Research (APJOR) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().