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Is It Beneficial to Provide Historical Price Information under Social Influence?

  • Xi'an Jiaotong University

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Due to dramatic improvements in online shopping and information technology, consumers are able to observe and imitate purchasing behaviors of peer consumers highlighting the critical importance of social influence in online market. In addition, consumers show keen interest in whether they 'gain' or 'loss' compared with a reference. This paper studies the joint impact of reference price and social influence on consumers' purchasing decisions and firms' pricing strategies by a two-period duopoly model where consumers obtain social utility from sales volume information and gain-or-loss utility from historical price information. We find that social influence has a negative impact on firms' profits. However, with the historical price disclosed, the gain-or-loss perception mitigates the negative effect of social influence by increasing the price in the early period and decreasing price latterly.

Original languageEnglish
Title of host publicationProceedings - 2018 IEEE 15th International Conference on e-Business Engineering, ICEBE 2018
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages223-227
Number of pages5
ISBN (Electronic)9781538679920
DOIs
StatePublished - 27 Dec 2018
Event15th International Conference on e-Business Engineering, ICEBE 2018 - Xi'an, China
Duration: 12 Oct 201814 Oct 2018

Publication series

NameProceedings - 2018 IEEE 15th International Conference on e-Business Engineering, ICEBE 2018

Conference

Conference15th International Conference on e-Business Engineering, ICEBE 2018
Country/TerritoryChina
CityXi'an
Period12/10/1814/10/18

Keywords

  • Dynamic game
  • Pricing strategy
  • Reference price effects
  • Social influence

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