To Discount or Not to Discount: A Game-Theoretic Analysis of the Pricing and Survival Dilemma in Luxury E-commerce

Yingxin Zhang, Shubham Gupta, Subodha Kumar, Xiangpei Hu

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Selling conspicuous products online is challenging for both brands (brands) and third-party e-commerce platforms (platforms). For brands, the trade-off between offering online discount and maintaining high-end brand image gives no easy answer, which leads to wide application of Minimum Advertised Pricing (MAP) policy to restrain their retailers. For platforms, lack of authority in controlling prices leaves them in a struggling-to-survive situation. Platforms could resort to Platform Discount promotion only when brands agree to participate. This interaction between MAP policy and platform discount, even though it is crucial for conspicuous brands and platforms, has not been studied in the current literature. To fill this gap, we analyze interaction between the brands and third-party e-commerce platforms using a game-theoretic model.

Original languageEnglish (US)
Title of host publication42nd International Conference on Information Systems, ICIS 2021 TREOs
Subtitle of host publication"Building Sustainability and Resilience with IS: A Call for Action"
PublisherAssociation for Information Systems
ISBN (Electronic)9781713893608
StatePublished - 2021
Externally publishedYes
Event42nd International Conference on Information Systems: Building Sustainability and Resilience with IS: A Call for Action, ICIS 2021 TREOs - Austin, United States
Duration: Dec 12 2021Dec 15 2021

Publication series

Name42nd International Conference on Information Systems, ICIS 2021 TREOs: "Building Sustainability and Resilience with IS: A Call for Action"

Conference

Conference42nd International Conference on Information Systems: Building Sustainability and Resilience with IS: A Call for Action, ICIS 2021 TREOs
Country/TerritoryUnited States
CityAustin
Period12/12/2112/15/21

All Science Journal Classification (ASJC) codes

  • Computer Science Applications
  • Information Systems

Keywords

  • game-theory
  • Luxury e-commerce
  • platform discount
  • transaction utility

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