Who benefits when coupons are issued by a duopoly from an e‐market?. (30th March 2021)

• Record Type: Journal Article
• Authors: Lv, Hongjun
• Is Part Of: Managerial and decision economics. Volume 42:Number 7(2021)
• Page Start: 1656
• Page End: 1664
• Publication Date: 2021-03-30
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.3333
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract : This study examines a two‐dimensional differentiation model of both vertical product preferences and horizontal coupon preferences and investigates how couponing affects firms' promotion strategies and profits. The results show that when e‐coupons are issued by Firm 1, Firm 2's equilibrium profit increases with Firm 1's cost. Given e‐coupon issued by both firms, equilibrium profits decrease in Firm 1's cost and increase with Firm 2's cost, respectively. To carry out coupon strategies, there exist lose–win, win–win, and lose–lose scenarios, depending on firms' costs. Our study can be used in many online shopping platforms, giving them a noteworthy basis for decision making.