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Evolutionary location and pricing strategies for service merchants in competitive O2O markets
He, Zhou1,2; Cheng, T. C. E.2; Dong, Jichang1; Wang, Shouyang1,3
2016-10-16
Source PublicationEUROPEAN JOURNAL OF OPERATIONAL RESEARCH
ISSN0377-2217
Volume254Issue:2Pages:595-609
AbstractAttracting customers in the online-to-offline (O2O) business is increasingly difficult as more competitors are entering the O2O market. To create and maintain sustainable competitive advantage in crowded 020 markets requires optimizing the joint pricing-location decision and understanding customers' behaviours. To investigate the evolutionary location and pricing behaviors of service merchants, this paper proposes an agent-based competitive O2O model in which the service merchants are modeled as profit-maximizing agents and customers as utility-maximizing agents that are connected by social networks through which they can share their service experiences by word of mouth (WOM). It is observed that the service merchant should standardize its service management to offer a stable expectation to customers if their WOM can be ignored. On the other hand, when facing more socialized customers, firms with variable service quality should adopt aggressive pricing and location strategies. Although customers' social learning facilitates the diversity of services in O2O markets, their online herd behaviors would lead to unpredictable offline demand variations, which consequently pose performance risk to the service merchants. (C) 2016 Elsevier B.V. All rights reserved.
KeywordAgent-based modeling Service competition Customer behavior Location Pricing
DOI10.1016/j.ejor.2016.03.030
Language英语
Funding ProjectHong Kong Polytechnic University[G-UA39]
WOS Research AreaBusiness & Economics ; Operations Research & Management Science
WOS SubjectManagement ; Operations Research & Management Science
WOS IDWOS:000377732300019
PublisherELSEVIER SCIENCE BV
Citation statistics
Cited Times:20[WOS]   [WOS Record]     [Related Records in WOS]
Document Type期刊论文
Identifierhttp://ir.amss.ac.cn/handle/2S8OKBNM/22896
Collection系统科学研究所
Affiliation1.Univ Chinese Acad Sci, Sch Econ & Management, 80 Zhongguancun East Rd, Beijing 100190, Peoples R China
2.Hong Kong Polytech Univ, Dept Logist & Maritime Studies, Kowloon, Hong Kong, Peoples R China
3.Chinese Acad Sci, Acad Math & Syst Sci, 55 Zhongguancun East Rd, Beijing 100190, Peoples R China
Recommended Citation
GB/T 7714
He, Zhou,Cheng, T. C. E.,Dong, Jichang,et al. Evolutionary location and pricing strategies for service merchants in competitive O2O markets[J]. EUROPEAN JOURNAL OF OPERATIONAL RESEARCH,2016,254(2):595-609.
APA He, Zhou,Cheng, T. C. E.,Dong, Jichang,&Wang, Shouyang.(2016).Evolutionary location and pricing strategies for service merchants in competitive O2O markets.EUROPEAN JOURNAL OF OPERATIONAL RESEARCH,254(2),595-609.
MLA He, Zhou,et al."Evolutionary location and pricing strategies for service merchants in competitive O2O markets".EUROPEAN JOURNAL OF OPERATIONAL RESEARCH 254.2(2016):595-609.
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