Abstract:

By considering the fact of the increasingly prominent phenomenon of consumer Behavior-Based Pricing (BBP) in the internet sales environment, we establish an internet channel decision model that is constituted by an e-commerce platform and a manufacturer. The decision problems about the manufacturer building its own internet direct channel mode and entering the e-commerce platform mode are analyzed respectively. Equilibrium decisions in the two modes are compared. Results show that if the manufacturer establishes its own internet direct channel, the e-commerce platform will offer lower price for new customers than for existing customers, while the manufacturer will treat new and existing customers differently based on the cost of building own channel and consumers' shopping cost. Under the manufacturer enters the e-commerce platform mode, the manufacturer will offer lower price for new customers, and the e-commerce platform's strategy for new and existing customers is influenced by commission rate. Moreover, when the commission rate is small and the licensing fee is moderate, or when the commission rate is moderate and the licensing fee is small can make the e-commerce platform will be willing to attract the manufacturer to move in and at the same time the manufacturer will choose to enter the e-commerce platform. Finally, we find that in order to enable the two participants to implement BBP when the manufacturer builds its own internet direct channel, it is necessary to ensure that the sales cost per unit product is small enough when it builds its own channel. In order to enable the two participants to implement BBP when the manufacturer enters the e-commerce platform, it is necessary to ensure that the commission rate and licensing fee charged by the e-commerce platform are low. The numerical analysis results show that it can generate more producer surplus than building its own internet direct channel if the manufacturer enters into the e-commerce platform, while the opposite is true for consumer surplus. Furthermore, if consumers' shopping cost and commission rate are large, the manufacturer enters into the e-commerce platform will generate more social welfare than in the case of establishing its own internet channel.

Key words: behavior-based pricing, internet channel, two-stage game, channel construction