摘要(英) |
When consumers purchase the homogeneous product or service, they may consider that the price provided by the different firms, they may refer the previous experience when they purchase product in the next period. However, when the firms face the consumers who are seeking variety, they may increase some incentive for consumers to attract them purchasing the product or service in the next period, for example, discount, freebie, and other promotions to increase the willingness of purchasing product.
Loyalty programs are very common in practice. In this study, we introduce loyalty program to understand the impact on market competition. Using a game-theoretic framework to discuss the three types of cases, including general consumer with fixed utility, variety seeking consumer, and variety seeking consumer with loyalty program. By analyzing the duopoly market, we discuss the solving procedure when firms optimize the selling pricing and loyalty program to compete each other in the market. More specifically, firm A and firm B will determine pricing decision in both periods, constructing a Nash equilibrium to analyze the solving procedure of selling price and loyalty programs. |
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