Effect Of Learning On The Enterprisers’ Price And Capacity Decisions

Consumer learning refers to the process by which individuals obtain the knowledge and apply the knowledge to their future purchases.Consumer learning is common in our daily life as well as in business society.On the one hand,the easy accessibility to information reinforces consumers’learning behavior,which further changes the way consumers thinking.On the other hand,the enterprisers should learn more about the consumers’ behavior and adjust their original decision-making principle to serve the consumers better.Operational learning is one specific learning process employed by the enterprisers to make operational decisions under consumer learning.Therefore,this paper investigates the influence of consumer learning and operational learning on pricing and capacity decisions.First,this thesis studies consumers’ observational learning behavior.Observational learning behavior is a keyhole behavior in consumer learning because learning usually starts with observation.To make our study specific,we choose a crowdfunding campaign as background and study how do consumers behave when the enterprises impede or encourage the learning as well as its influence on the enterprisers’ decisions.We find that observational learning’s effect on the enterprisers’ profitability is complicated.For example,in crowdfunding,this effect would be moderated by the enterprisers’ financial target.When the target is either high or low,encourage the consumers’ observational learning could benefit the enterprisers;however,when the target is medium,the enterprisers should impede the learning to avoid loss.Second,this thesis studies consumers’ rational learning behavior.Rational learning refers to the learning in which the learners start with subjective beliefs about others’strategies and will have an accurate prediction of the future via Bayesian updating in the long run.When the number of consumers increases,it is nearly impossible to analyze everyone’s behavior.However,the propose of rational learning could benefit the analysis of consumers’ behavior in the queueing system,making the results more traceable.We show this by choosing one service system and studying how do the service providers set the price and capacity under the consumers’ rational learning behavior.We show that the monopoly service provider should set a proper service speed and price to capture the whole market,and the duopoly service providers should slow down their speed,increase the price,and share the market.Besides,we show that there may exist multiple Nash Equilibrium solutions in the duopoly case.More specifically,when the market size is large,the two servers will share the market equally.However,when the market size is small,one server may choose a high price to serve a small part of the market while the other one may set a low price to serve a large part of the market.Finally,this thesis studies the enterprisers’ operational learning behavior.In the past,the enterprisers usually separately estimate the demand and then do operational optimization.The problem is that an inaccurate demand estimation would cause the wrong operational decision.To solve this problem,researchers propose operational learning.With operational learning,the operational decision could be integrated with the demand estimation,reshaping the way enterprisers making decisions.We show that the operational learning is still superior when there exists a large amount of consumers’learning behaviors by proposing a simple operational decision-making method called Sample Scaling that could benefit the service providers.This method is also valid when there is a closed-form expression of the profit function.