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This paper studies a creator's quality commitment strategies with uncertain demand when the creator lacks setup funding and chooses crowdfunding to finance. Facing uncertain demand, the creator may or may not choose to make a quality commitment. Conventional wisdom indicates that the strategy of committing to a certain quality outperforms the no-commitment strategy by eliminating the consumers' strategic behavior of delaying purchases. We build a two-period model consisting of crowdfunding and spot sales periods, a creator lacking setup funding, and consumers with heterogeneous valuations for the product. When considering the creator's setup cost and market uncertainty, we find, counterintuitively, that making no quality commitment to consumers can be more profitable for the creator because of the advantage of flexibility. Moreover, our analysis shows that when the creator's setup cost is high enough, the profit-maximising creator will make a quality commitment to consumers and offer a higher-quality product than when making no commitment. Also, we show that the product quality increases with the market uncertainty under certain conditions. In addition, we find that the creator should finance through crowdfunding only when the setup cost is less than a threshold, and the threshold increases with market uncertainty. [ABSTRACT FROM AUTHOR]

This paper considers a manufacturer selling his products with the marketplace or the reselling mode under the cap‐and‐trade regulation. Coupons are allocated when selling the products. We explore the optimal decisions, the selection and the coordination with the two modes. First, we analytically find that the increase of the cap and platform power (commission rate) increases (decreases) the total production quantity and the optimal production quantity for coupon‐sensitive consumers, and interestingly find that it reduces (increases) the production quantity for coupon‐insensitive consumers when the sensitivity of the coupons is high. Furthermore, the optimal profit of the manufacturer first increases and then decreases with the cap when the emission intensity is low, and it increases with the cap when the emission intensity is high. Second, the marketplace mode creates more (less) profits for the manufacturer if the order‐fulfillment cost is low (high). Whether the marketplace mode or the reselling mode will generate more carbon emission depends on the commission rate and the platform power. Finally, the marketplace mode is not capable of coordinating the manufacturer and the platform at all times, while the reselling mode can coordinate the two firms after considering a coupon‐sharing contract under considerable platform power, and they can achieve Pareto improvement with a two‐part tariff contract under the generalized Nash bargaining framework. [ABSTRACT FROM AUTHOR]

Due to possible supply disruptions because of a low-cost unreliable supplier, a firm may use a high-cost reliable supplier as an additional regular supplier (dual sourcing) or an emergency backup supplier with an extra emergency cost (contingent sourcing). We consider the firm's sourcing problem when the pricing decision is made before any supply uncertainty is resolved (committed pricing) or after the supply state is realised (responsive pricing). By comparing the relative value of responsive pricing in contingent sourcing to that in dual sourcing, we study the relationship between contingent sourcing and responsive pricing in mitigating supply disruption risks. We show that the emergency cost and potential lost sales caused by disruption probability jointly impact the interplay of these two strategies. More specifically, when the emergency cost is low and the potential lost sales are lower under contingent sourcing than that under dual sourcing, contingent sourcing and responsive pricing are substitutes; otherwise, they are complements. Furthermore, we examine how disrupted capacity, i.e. the quantity that the unreliable supplier can deliver when disrupted, impacts the interplay, and find that the probability of the substitution relationship becomes higher when the disrupted capacity increases. We also find that under committed pricing, contingent sourcing is not optimal for any value of disruption probability when the emergency cost is high, a phenomenon that does not exist under responsive pricing. [ABSTRACT FROM AUTHOR]

We study an online platform's demand information sharing strategy in a distribution channel where a manufacturer distributes products through both platform and seller channels. Information sharing becomes increasingly important in recent years as online platforms gather massive consumer information that is typically invisible by upstream manufacturers and competing sellers/retailers. We study an online platform's demand information sharing strategy in a distribution channel where a manufacturer distributes products through both platform and seller channels. We consider two different selling structures: the conventional reselling model (in which the platform acts as a reseller) and the agency/marketplace model (in which the platform acts as an agency). We find that for both selling formats, the platform always has incentives to share information with at least one party (either manufacturer or seller or both). The marketplace selling format gives the platform stronger incentives to share information with the seller. With low competition in the reselling model, the platform may not share information with the manufacturer, whereas it always does in the marketplace model. Interestingly, the forecasting accuracy does not structurally change optimal information sharing in the reselling model but induces the platform to share information with both the manufacturer and the retailer when it is high or low in the marketplace model. Our findings provide useful guidelines for an online platform on when and whom to share demand information with. History: Yuxin Chen served as the senior editor and Zsolt Katona served as associate editor for this article. Funding: This research was supported in part by the National Natural Science Foundation of China [Grants 71971205, 72188101, 71671173, 72091210/72091215, and 71731010]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mksc.2022.1397. [ABSTRACT FROM AUTHOR]

Reward‐based crowdfunding with the all‐or‐nothing mechanism helps cash‐strapped creators raise funds from potential consumers to develop new products. However, this mechanism may hurt the creator in the long run because possible buying frenzies of strategic consumers will cannibalize the demand for spot sales if the project succeeds with overfunding. Through a two‐period model incorporating a crowdfunding period and a spot sales period, we find that strategic consumers' purchasing decisions depend on the probability that they will like the product in spot sales. Moreover, we show that crowdfunding cannot be used to finance when the setup cost that a creator needs to pay for the production is sufficiently high. In addition, for creators who can use crowdfunding to finance, contrary to the intuition that they should not take risks when the market uncertainty is high, we find the opposite results when we take the joint effect of the setup cost and market uncertainty into consideration. To be specific, when the market uncertainty is high and the setup cost is higher than a threshold, the creator can optimally choose the risky strategy. Furthermore, the creator may benefit from market uncertainty when a high setup cost is required to launch the product. [ABSTRACT FROM AUTHOR]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.ejor.2007.10.016 Byline: Yugang Yu (a)(b), Feng Chu (c), Haoxun Chen (c) Keywords: Supply chain inventory; Stackelberg game; Lot-sizing; Pricing; Raw materials Abstract: Vendor managed inventory (VMI) is an inventory management strategy to let a vendor manage his retailers' inventories, which makes the vendor have the opportunity to obtain some inventory and market-related information of his retailers. This paper discusses how the vendor can take advantage of this information for increasing his own profit by using a Stackelberg game in a VMI system. The vendor here is a manufacturer who procures raw materials to produce a finished product and supplies it at the same wholesale price to multiple retailers. The retailers then sell the product in independent markets at retail prices. Solution procedures are developed to find the Stackelberg game equilibrium that each enterprise is not willing to deviate from for maximizing his own profit. The equilibrium makes the manufacturer benefited, and the retailers' profits maximized. The equilibrium can then be improved for further benefiting the manufacturer and his retailers if the retailers are willing to cooperate with the manufacturer by using a cooperative contract. Finally, a numerical example and the corresponding sensitivity analysis are given to illustrate that: (1) the manufacturer can benefit from his leadership, and monopolize the added profit of the VMI system in some cases; (2) The manufacturer can further improve his own profit, and then the retailers' profits by the cooperative contract, as compared to the Stackelberg equilibrium; (3) market and raw material related parameters have significant influence on every enterprise's net profit. Author Affiliation: (a) RSM (Rotterdam School of Management), Erasmus University, The Netherlands (b) Business School, University of Science and Technology of China, Hefei, Anhui 230026, China (c) FRE CNRS 2848 ICD-LOSI, University of Technology of Troyes, 10010 Troyes, France Article History: Received 4 March 2005; Accepted 11 October 2007

Credit purchasing has seen dramatic growth recently, requiring retailers to adapt their operations in response to an online platform’s strategic credit offering. This article presents a model for exploring the platform’s strategy for offering credit and the retailer’s response, considering consumer spillover, that is, how much the benefit of credit outweighs the drawbacks. The consumers differ in their disposable personal incomes and valuations for the product, and they may perceive a spillover from the credit. We study an integrated system, where the platform acts as a retailer and determines the credit-offering strategy and the price simultaneously. We find that the platform will offer credit only when the spillover is above a given negative threshold, and will charge an interest rate for credit only when the spillover is positive. In addition, the price exhibits a nonmonotonic change with the credit spillover, but the demand remains unchanged at a high level. We then extend the analysis to an independent system, where the retailer sells through the platform. We find that the revenue-sharing percentage the retailer pays is critical for the platform to optimize its credit strategy. Specifically, the platform will never offer interest-free credit when the percentage is low, but in other cases may do so and the credit offering does not harm the retailer’s profit. Interestingly, when the spillover is moderate, the demand may decrease instead of increase, indicating a deviation from the presumed intention of offering credit. [ABSTRACT FROM AUTHOR]

This paper studies a vendor-managed-inventory (VMI) supply chain where a manufacturer, as a vendor, procures a type of nondeteriorating raw material to produce a deteriorating product, and distribute it to multiple retailers. The price of the product offered by one retailer is also influenced by the prices offered by other retailers because consumers can choose the product from any of the retailers. This paper is one of the first papers that propose an integrated model to study the influence of pricing and deterioration on the profit of such a VMI system. A hybrid approach combining genetic algorithms and an analytical method is developed for efficiently determining the optimal price of the product of each retailer, the inventory policies of the product and the raw material. Our results of a detailed numerical study show that parameters related to the market and deterioration have significant influences on the profit of the VMI system. However, different from common intuition, we find that an increase in the substitution elasticity of the product among different retailers can bring an increase in the retail prices of the product, while the increase of the market scale can reduce the retail prices. [ABSTRACT FROM AUTHOR]

Vendor-managed inventory (VMI) is a widely used co-operative inventory policy in supply chains in which each enterprise has its autonomy in pricing. In this paper, a leader–follower Stackelberg game in a VMI supply chain is discussed where the manufacturer, as a leader, produces a single product with a limited production capacity and delivers it at a wholesale price to multiple different retailers, as the followers, who then sell the product in dispersed and independent markets at retail prices. An algorithm is then developed to determine the equilibrium of the Stackelberg game. Finally, a numerical study is conducted to understand the influence of the Stackelberg equilibrium and market-related parameters on the profits of the manufacturer and its retailers. Through a numerical example, our research demonstrates that: (a) the market-related parameters have significant influence on the manufacturer's and its retailers' profits; (b) a retailer's profit may not necessarily be lowered when it is charged with a higher inventory cost by the manufacturer; and (c) the equilibrium of the Stackelberg equilibrium benefits the manufacturer. [ABSTRACT FROM AUTHOR]

This study investigates a green-product pricing problem by taking into account consumer environmental awareness (CEA) and non-green (regular) product reference. The pricing strategies under three scenarios are investigated: single-product pricing; dual-product competition; and asymmetric-information case. The analytical results show that differential pricing strategies should be adopted, facing consumers with differential purchase behaviors (i.e., differential levels of CEA and reference recognition). The green product’s pricing strategy is significantly affected by asymmetric information. In contrast to the case of symmetric information, the firm should adopt distinguished pricing strategies in consideration of its green production cost. [ABSTRACT FROM AUTHOR]