Study Of How Consumers Sharing Products Affects Firms’ Operations Decisions

This paper builds a model which consisting of a firm,consumers and a third-party platform.In the model,the product life-cycle is divided into two stages.The consumers are divided into two categories: complete rationality and overconfidence.At the same time,the utility of consumers follows a uniform distribution.The firm produces and sales products,and strategically decides the selling price at the beginning of the first stage.The rental price is set by the third-party platform.In the consumption process,consumers can only decide whether to buy the product in early phase,but can decide whether to lease the product at the beginning of each period.Consumers who buy product at the beginning of the first period will use product at each stage.This paper mainly studies the impact of product sharing between consumers based on B2 C pattern on traditional supply chain composed of producer and consumers,and the influence of product sharing on firm’s operation decisions.Our study finds that the firm can decide the optimal price without product sharing,and the price is unchanged.With the increasing of ratio of rational consumers,demand of products is decreasing,and profits of the firm will decline.Secondly,the firm can decide the optimal selling price when the rental service is offered by itself.Consumers will not use the rental service offered by the firm at equilibrium,that is,it will damage its income if the firm provides rental service directly.Finally,the firm can decide the optimal selling price and the optimal wholesale price,the third-party platform can decide the optimal rental price when the third-party platform offers rental service.The producer and the third-party platform both have rational expectations for consumers behavior,in this case,the optimal rental price is affected by the wholesale price,and the firm can adjust the price to affect whole market to maximize its benefit.