A Study On Optimal Dynamic Pricing And Effort Making Under Collaborative Contract Of Revenue And Cost Sharing

In recent years,with the widespread popularity of the Internet and smart phones,online shopping develops rapidly and attracts more and more sellers to explore the online sales channel actively.For example,since December 12,2015,Gree Electric has deepened cooperation with JD by selling its new product on the JD Mall,which opens a dual-channel sales mode for Gree.The third party E-commerce platforms(TPECPs,for short),e.g.,JD,Tmall and Amazon,usually have a powerful advantage in customer base,payment guarantee system and operational management,etc.,which attracts more sellers to cooperate with them.However,the sellers and the TPECPs may find it difficult to coordinate decisions,such as pricing,effort making in their cooperation.This thesis based on the cooperation of a third party E-commerce platform(TPECP)and a seller,in which the seller uses dual channels(a brick-and-mortar shop and a online shop on a TPECP)to sell one seasonal perishable product.The maximum expected revenue functions of the seller and the TPECP are established based on a collaborative contract of revenue and cost sharing both in a decentralized setting and a centralized setting.A dynamic programming technique is used to obtain the equilibrium solutions of the maximum expected revenue functions based on the concept of sub-game perfect Nash equilibrium.By analyzing the structural characteristics of the equilibrium solutions and the revenue functions,this master's thesis presents some theorems and propositions on the relationship among the optimal solution,inventory and the sales period.Finally,numerical examples are given to illustrate the findings of the thesis.The results provide support decisions for the seller to optimize inventory decision and adjust price timely,and also give an theoretical instruction for the TPECP in the decision of effort investment strategy.Last but not the least,this thesis also shows that a collaborative contract of revenue and cost sharing under the decentralized case could benefit both sides.Compared with the decentralized case,the online shop's price is lower and the total expected revenue is bigger in the centralized case,the latter is able to create more benefits for both consumers and the partners,which provides a new direction for further cooperation between the seller and the TPECP.