| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 862928 | Procedia Engineering | 2011 | 6 Pages |
Abstract
To study how e-tailors should fix the price to influence word-of-mouth to maximize profits, this paper comes up with a dynamic pricing model based on online product reviews. Customers base consumption decisions on the principle of utility maximization. A lower price can lead to more positive reviews and improve the utility, but it may reduce the profit. The model gives the optimal pricing strategy for the e-tailor in a duopoly market competing with an offline retailor. The analytical results show with the increase of online reviews, the optimal pricing of the e-tailor increases and the growth rate declines.
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Physical Sciences and Engineering
Engineering
Engineering (General)
