Loss Leading pricing is often referred to as an advertising strategy which allows retailers to attract consumers by subsidizing some products and make profits from other items; in this way, below-cost pricing may improve consumer welfare by compensating consumers for their lack of information. This paper shows that large retailers can instead use loss leading as an exploitative device at the de...

Cooperative advertising is an incentive offered by a manufacturer to influence retailers’ promotional decisions. We study a dynamic durable goods duopoly with a manufacturer and two independent and competing retailers. The manufacturer as a Stackelberg leader announces his wholesale prices and his shares of retailers’ advertising costs, and the retailers in response play a Nash differential gam...

This paper tests various implications of quality-based price discrimination theory in the context of internet book retailers’ shipping menus. Many internet retailers create quality variants of a homogeneous good by bundling it with several shipping options that differ by delivery time. This practice can allow retailers to extract further surplus from consumers through quality-based price discri...

I this paper, we develop a theoretical model to analyze the pricing strategies of competing retailers with asymmetric cross-selling capabilities when product demand changes. Our results suggest that retailers with better opportunities for cross-selling have higher incentives to adopt loss-leader pricing on high-demand products than retailers with low cross-selling capabilities. As a result, pri...

The Internet has brought a new way of collaboration among consumers to the door steps of retailers. Existing studies have assumed that retailers play an active role and focused on discussing how retailers can make good use of Web 2.0 to develop new business models, however little has been done to address what retailers should do if being forced to cope with changes. This paper, based on a stake...

This paper studies supply chain demand variability in a model with one supplier and N retailers that face stochastic demand. Retailers implement scheduled ordering policies: Orders occur at fixed intervals and are equal to some multiple of a fixed batch size. A method is presented that exactly evaluates costs. Previous research demonstrates that the supplier’s demand variance declines as the re...

The protocol by which “contactless” (NFC) credit cards operate is insecure. Previous work has done much to protect this protocol from malicious third parties, e.g. eavesdroppers, credit card skimmers, etc. However, most of these defenses rely on the retailers being honest, and on their Points of Sale following the credit card protocol faithfully. In this paper, we extend the threat model to inc...

The Web storefront of Internet retailers is the equivalent of a physical storefront of a brickand-mortar company. It is the Web surfer’s first contact with Internet retailers. While much has written about how to develop a good Website, little research has been carried out on the assessment of the effectiveness of Web storefronts. A Web storefront needs to possess not only a pleasing layout and ...

This paper describes the rationale behind a study of hybrid retailers. These retailers employ both electronic and physical channels to support the downstream sales of goods and services to end users. It is hypothesized that hybrid retailers are able to exploit synergies between physical and electronic channels that enable them to better attract new customers and retain existing ones. Potential ...

Trust potentially affects the decision-makers’ behaviors and has a great influence on supply chain performances. We study the information sharing process considering trust in a two-tier supply chain with one upstream agent and two retailers, where the agent recommends ordered quantities (ROQ) to retailers and the retailer decides her/his ordered quantities according to the agent’s recommendatio...