Dynamic Pricing And Information Disclosure Of New Experience Goods Under Online Reviews

With the rapid development of Internet technology and the rise of online shopping platforms,the traditional offline retail model has been gradually replaced by the online sales model.Due to the opacity of online channels,consumers will have uncertainty about new products.The actual valuation of the product by consumers cannot be ascertained.Online reviews help consumers eliminate this kind of product perception uncertainty.This information is not only useful for consumers who have not yet purchased the product,but also for companies.Online reviews have profoundly affected consumers’ purchasing decisions,as well as the company’s operations and pricing strategies.The product information generated by consumers has brought new challenges to the companies.Under the above background,in this paper,we develop a two-period dynamic game model between a monopolistic company and consumers based on theories of social learning,game theory,optimization theory and consumer utility,and solve the model and get the results of sub-game perfect Nash equilibrium according to the backward induction method of dynamic programming.And the research findings provide scientific suggestions for companies.Firstly,in this thesis,we consider that consumers can obtain product information(quality attribute and characteristic attribute)from online reviews,research how companies should formulate their information disclosure strategies and pricing strategies when consumer reviews exist,and investigate the impact of review information on companies’ information disclosure strategies and profit.In response to the above problems,we have established a benchmark model when there is no online review,and then introduced online reviews to develop an information update model,and solved the optimal strategy through Bayesian information updating.Our analysis yielded three main insights:(1)Companies with high-cost product will be more inclined to disclose information,while companies with low-cost products are unwilling to disclose product information.And online review information will prompt more companies to take the initiative to disclosure product information.(2)When the review signal is favorable,or when the cost is high enough or the consumer’s willingness to comment is large enough,companies are more inclined to adopt net profit-driven pricing in the second period,that is,charging a high price to satisfy high-valued consumers;otherwise,adopt a demand-driven pricing strategy,that is,set a low price to satisfy more segments in the market.In addition,a moderate consumer’s willingness to comment may lower the company’s optimal initial price.(3)With the increase of consumers’ willingness to comment,corporate profits may show a three-stage change,and there will be two jumps.When consumers’ willingness to comment is low,online review information may harm the profits of companies with low-cost products;when consumers’ willingness to comment is moderate or large,companies can profit from such consumer-generated information.Secondly,based on the above research,we have further considered the situation of vertically differentiated prior quality and different perceived quality.Consumers post reviews based on perceived quality.Consumers in the market can identify the average perceived quality of the products of purchased consumers based on the distribution of reviews.This research results show that:(1)Contrary to the traditional view that review information is beneficial to consumers,online reviews may harm consumer surplus.The existence of online reviews may cause both companies and consumers to “lose-lose”,and it may also make both sides of the game a “win-win” situation.(2)When the average perceived quality or the prior quality is higher,the total demand is greater.In addition,the greater the difference between the prior quality and the average perceived quality,the greater the amount of change in the total demand.Companies may raise or lower their initial prices to shift the two-period consumer demand in response to review information.(3)Under different prior belief,the impact of consumer reviews on the initial pricing strategy of a company will be different.There are four different areas for the impact of review information on the optimal initial price.