Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers

Weixin SHANG, Shilu TONG, Yunjie WANG

Research output: Other Conference ContributionsConference Paper (other)Research

Abstract

We examine a duopolistic market with two firms competing on positioning and
pricing for customers who are variety-seeking or non-variety-seeking, and
strategic or myopic. Contrary to the conventional wisdom that variety-seeking
customers are less profitable customers, we find that firms may benefit from
more variety-seeking customers under both price commitment and dynamic
pricing when some of these customers are myopic. Strategic customer behavior
intensifies competition and hurts the firms. Under each pricing scheme, either
myopic variety-seeking customers or non-variety-seeking customers can be the
most profitable customer group.
Original languageEnglish
Publication statusPublished - 18 Jun 2018
EventINFORMS International Conference 2018: A Better World Through O.R., Analytics, and AI - Taipei International Convention Center, Taipei, Taiwan, Province of China
Duration: 17 Jun 201820 Jun 2018
http://meetings2.informs.org/wordpress/2018international/

Conference

ConferenceINFORMS International Conference 2018
CountryTaiwan, Province of China
CityTaipei
Period17/06/1820/06/18
Internet address

Fingerprint

Variety seeking
Positioning
Pricing
Wisdom

Bibliographical note

Information Management in Supply Chains
Invited Session: Operations and Decisions in Smart Manufacturing and Logistics
Chair: Weixin Shang, Lingnan University (HK)

Cite this

SHANG, W., TONG, S., & WANG, Y. (2018). Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers. Paper presented at INFORMS International Conference 2018, Taipei, Taiwan, Province of China.
SHANG, Weixin ; TONG, Shilu ; WANG, Yunjie. / Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers. Paper presented at INFORMS International Conference 2018, Taipei, Taiwan, Province of China.
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SHANG, W, TONG, S & WANG, Y 2018, 'Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers' Paper presented at INFORMS International Conference 2018, Taipei, Taiwan, Province of China, 17/06/18 - 20/06/18, .

Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers. / SHANG, Weixin; TONG, Shilu; WANG, Yunjie.

2018. Paper presented at INFORMS International Conference 2018, Taipei, Taiwan, Province of China.

Research output: Other Conference ContributionsConference Paper (other)Research

TY - CONF

T1 - Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers

AU - SHANG, Weixin

AU - TONG, Shilu

AU - WANG, Yunjie

N1 - Information Management in Supply Chains Invited Session: Operations and Decisions in Smart Manufacturing and Logistics Chair: Weixin Shang, Lingnan University (HK)

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N2 - We examine a duopolistic market with two firms competing on positioning andpricing for customers who are variety-seeking or non-variety-seeking, andstrategic or myopic. Contrary to the conventional wisdom that variety-seekingcustomers are less profitable customers, we find that firms may benefit frommore variety-seeking customers under both price commitment and dynamicpricing when some of these customers are myopic. Strategic customer behaviorintensifies competition and hurts the firms. Under each pricing scheme, eithermyopic variety-seeking customers or non-variety-seeking customers can be themost profitable customer group.

AB - We examine a duopolistic market with two firms competing on positioning andpricing for customers who are variety-seeking or non-variety-seeking, andstrategic or myopic. Contrary to the conventional wisdom that variety-seekingcustomers are less profitable customers, we find that firms may benefit frommore variety-seeking customers under both price commitment and dynamicpricing when some of these customers are myopic. Strategic customer behaviorintensifies competition and hurts the firms. Under each pricing scheme, eithermyopic variety-seeking customers or non-variety-seeking customers can be themost profitable customer group.

M3 - Conference Paper (other)

ER -

SHANG W, TONG S, WANG Y. Duopolistic Positioning and Pricing Competition with Variety-Seeking and Strategic Customers. 2018. Paper presented at INFORMS International Conference 2018, Taipei, Taiwan, Province of China.