Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
11005137 | Transportation Research Part E: Logistics and Transportation Review | 2018 | 23 Pages |
Abstract
We investigate the impact of investments in delivery service with one or two major competing online retailers. Customers diffuse among the retailers, based on purchasing experience and online reviews (i.e., social network). Firms decide on investments aimed at maximizing profit. For both Nash and Stackelberg competition cases, the effect on market share, optimal investment cost and profit are calculated. Cases without social network are also studied, showing that a social network leads to faster convergence of the market. When a social network exists, both the leader and follower invest more, with higher profits. Our results confirm experiences from competition practice.
Related Topics
Social Sciences and Humanities
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Business and International Management
Authors
Ruiqi Hou, René de Koster, Yugang Yu,