Due to demand uncertainty, retailers in the perishable goods market face challenges in pricing decisions. Although e-commerce platforms can offer product demand information, retailers must weigh the benefits of obtaining demand information against the commission costs and the risk of profit loss caused by intensified competition within the platform. This paper aims to investigate the conditions under which two retailers with product quality differentiation choose to enter an e-commerce platform to access demand information and thus mitigate the negative impact of demand uncertainty.
This paper considers four scenarios: only the low-quality (or high-quality) retailer enters the e-commerce platform, both retailers enter and neither enters; discusses the optimal pricing decisions for the retailers under each scenario and then obtains the retailer’s e-commerce platform entry strategy based on the probability of high demand and the consumer purchase intention.
The results show that when the consumer purchase intention is low or when the probability of high demand is high, both retailers choose not to enter the e-commerce platform for demand information. When the commission rate charged by the e-commerce platform and the probability of high demand are moderate, and the consumer purchase intention is high, the two retailers have the incentive to enter the platform, resulting in a mixed strategy Nash equilibrium. In other situations, only the low-quality retailer enters the platform to obtain demand information.
This paper addresses the realistic issue of pricing decisions and e-commerce platform entry strategies of retailers with product quality differentiation under demand uncertainty, which extends the channel choice theory under demand uncertainty and enriches the research on platform economics and firm competitive behavior.
