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Pricing and investing in co-creation with customers for a duopoly
International Journal of Production Economics ( IF 12.0 ) Pub Date : 2021-04-30 , DOI: 10.1016/j.ijpe.2021.108145
Rui Yang , Wansheng Tang , Mengdi Dou , Jianxiong Zhang

Customers participating in the firm's product co-creation can discern the precise valuation about the product before actual consumption and get a potential benefit which encourages them to buy the products they have co-created. This observation prompts firms to lower participation costs via customer co-creation investment (CCI) and attract customers to participate in their co-creation; meanwhile, provides the opportunity for them to practice discriminatory pricing based on customer's participation behavior. In an experience good duopoly, we investigate the firms' co-creation strategy, which interacts with their CCIs and pricing, via a game-theoretical approach. We find that co-creation can lead to less profits, especially if firms have a higher ability to change investment into lower customer's participation cost, which is counterintuitive, caused for competition. Besides, co-creation can lead to a higher social welfare when the probability of customer's high valuation is relatively high; otherwise, it leads to a lower one. Within co-creation, the application of price discrimination can effectively alleviate competition and bring firms more profits when customer's ex-ante valuation is more likely to be high; otherwise, it will hurt firms. Price discrimination can enhance the social welfare when the probability of customer's high valuation is relatively low; otherwise, it will decrease the social welfare.



中文翻译:

定价和投资与客户共同创造双头垄断

参与公司产品共同创造的客户可以在实际消费之前识别产品的准确估价,并获得潜在的利益,这会鼓励他们购买他们共同创造的产品。这一发现促使企业通过客户共同创造投资(CCI)降低参与成本,并吸引客户参与他们的共同创造。同时,为他们提供了根据客户的参与行为实行歧视性定价的机会。在经验丰富的双头垄断中,我们研究了企业的共同创造策略,该策略通过博弈论方法与CCI和定价相互影响。我们发现,共同创造可以减少利润,尤其是如果公司具有将投资转换为较低客户参与成本的更高能力时,这是违反直觉的,是造成竞争的原因。此外,当客户获得高估值的可能性相对较高时,共同创造可以带来更高的社会福利;否则,它会导致较低的值。在共同创造中,价格歧视的应用可以有效地缓解竞争,并在客户的事前估值更有可能变得较高时为公司带来更多的利润;否则会伤害企业。当客户的高估值概率相对较低时,价格歧视可以增强社会福利;否则会降低社会福利。价格歧视的应用可以有效地缓解竞争,并在客户的事前估值更有可能变得较高时为公司带来更多的利润;否则会伤害企业。当客户的高估值概率相对较低时,价格歧视可以增强社会福利;否则会降低社会福利。价格歧视的应用可以有效地缓解竞争,并在客户的事前估值更有可能变得较高时为公司带来更多的利润;否则会伤害企业。当客户的高估值概率相对较低时,价格歧视可以增强社会福利;否则会降低社会福利。

更新日期:2021-05-06
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