Research on the Cashback Strategy of E-tailers with Strategic Consumers

Danqin Yang (), Nan Yan () and Jiani Ding
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Danqin Yang: Nanjing University of Science & Technology, School of Economics and Management
Nan Yan: Nanjing University of Science & Technology, School of Economics and Management
Jiani Ding: Nanjing University of Science & Technology, School of Economics and Management

A chapter in LISS 2020, 2021, pp 731-745 from Springer

Abstract: Abstract We integrate the cashback promotion strategy and the strategic consumer’s waiting behavior into a framework and consider a two-stage model in which an e-tailer sells products to strategic customers through two online platforms, e-shop and cashback website (CW). We develop a model to characterize the equilibrium decisions for each participant and investigate the impacts of cashback on the decisions and profits of e-tailer and customers. We found e-tailers can restrain strategic consumer behavior by reasonable use of cashback websites. And e-tailers can make the CW plays the role of advertising and price discrimination through pricing. When the CW only plays the role of advertising, e-tailers can make profits from it.

Keywords: Cashback website; Strategic consumer; Rational expectation equilibrium; Newsvendor model (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-33-4359-7_51

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DOI: 10.1007/978-981-33-4359-7_51

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