Abstract

Along with the popularity of online shopping, the cash-back industry is witnessing dramatic development. Under this backdrop, retailers who sell products with network externalities make different decisions about affiliating with cash-back sites. In this paper, we set up a cash-back model considering network externalities. Our goal is to identify the condition under which it is profitable for retailers whose products exhibit network externalities to affiliate with a cash-back site and to find out the driving force of the profitability. We find that only when there are more low-type consumers than high-type consumers and the degree of network externalities is lower than a certain threshold is it profitable for such a retailer to affiliate with an independent cash-back site, because the cash-back rate is decreasing in the intensity of network externality. It is the price discriminative effect instead of the promotive effect that makes it profitable. We show that the double-marginalization problem between the retailer and an independent cash-back site leads to the cash-back paradox where all consumers pay more for the product in the presence of a cash-back channel. We also show that when the retailer affiliates with two cash-back sites, each site has the incentive to lower the cash-back rate to take advantage of network externalities, which makes the cash-back paradox more likely to happen and makes it less likely for a retailer to benefit from cash-back channels. Furthermore, we suggest the retailer establish his own cash-back channel. Our work provides implications for retailers as well as for cash-back sites and consumers.

摘要

随着在线购物的普及，现金返还行业正经历着巨大的发展。在这种背景下，销售具有网络外部性的产品的零售商在加入现金返还网站方面做出不同的决定。在本文中，我们考虑网络外部性建立了现金返还模型。我们的目标是确定其产品具有网络外部性的零售商与现金返还站点相关联的零售商在何种情况下可获利，并找出获利的驱动力。我们发现，只有当低类型消费者比高类型消费者多并且网络外部性程度低于某个阈值时，这样的零售商才有资格与独立的现金返还网站建立联盟关系，因为现金返还率降低了网络外部性的强度。使价格有利可图的是价格歧视效应而不是激励效应。我们表明，零售商和独立的现金返还站点之间的双重边际化问题导致了现金返还悖论，即在存在现金返还渠道的情况下，所有消费者都为产品支付更高的价格。我们还表明，当零售商拥有两个现金返还站点时，每个站点都有动机降低现金返还率以利用网络外部性，这使得现金返还悖论更可能发生，并且不太可能发生。让零售商受益于现金返还渠道。此外，我们建议零售商建立自己的现金返还渠道。