The effects of online product reviews on manufacturer's pricing policy
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Affiliation of Author(s):[1] School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, China
Journal:2012 9th International Conference on Service Systems and Service Management - Proceedings of ICSSSM'12
Key Words:Electronic commerce - Manufacture - Competition
Abstract:With the rapid development of e-commerce, online product reviews play an important role in B2C environment. Online product reviews can affect the potential consumers' purchasing decision (demand for a product), which may in turn affect manufacturers' pricing strategies. However, it is still not clearly known how the information contained in online reviews affects a manufacturer's pricing policy. To fill this gap, this paper considers a two-stage pricing problem in which a monopoly manufacturer makes prices for a product. We calculate the optimal pricing equilibrium of the monopoly manufacturer in two stages, and the result shows that manufacturer should adjust his pricing policy according to the actual evaluation of the product quality from the online consumers' reviews. ? 2012 IEEE.
Document Type:Conference article (CA)
Page Number:557-561
Translation or Not:no