158 / 2024-04-22 11:31:45

Selling Formats Choice with Platform Sales Effort and Impacts on Third-Party Resellers

online platform, selling formats choice, sales effort, game theory

We consider a manufacturer sells products through both an online platform and a third-party reseller who subsequently resell to customers through the online platform. The platform exerts sales effort to boost demand. Although an agency selling format is adopted for the third-party reseller, both reselling and agency selling formats are prepared for the online platform and manufacturer. We build a game-theoretic model to study the equilibrium selling formats choice. Results show that either reselling or agency selling format may be desirable not only for the platform and manufacturer, but also for the third-party reseller, i.e., Pareto-improvement. Further, we conduct several model extensions to confirm the robustness of main results.