Analysis of pricing strategies for community-based group buying: The impact of competition and waiting cost

Group buying is one of the major pricing mechanisms in which retailers can offer low group rates due to a saving on transaction costs and its target consumers are those with lower sensitivity on waiting time. Under group buying, group size significantly affects the waiting cost to which consumers have different tolerances. In this paper, we develop a two-stage pricing game to evaluate the impact of the waiting cost, competition, and group-facilitating technology on the profitability and efficiency of community-based group buying. Our results point out that when a monopolistic retailer operates a mixed channel, the retailer will charge a relatively high group rates in the group-buying channel to force most consumers to choose individual buying unless the transaction cost in the individual-buying channel is sufficiently high. If two competing retailers adopt different pure channels, investment in group-facilitating technology may weaken the profit of the retailer adopting community-based group buying when the actual selling-cost saving resulted from community-based group buying is not significant.     

Reward mechanisms for P2P VoIP networks

As we have seen, P2P VoIP software, such as Skype, has emerged from the current generation of telecommunication systems. However, establishing communication applications based on P2P networks without considering the operational models of the Internet presents potential dangers. In this study, we treat a VoIP telephone conversation as a dynamic game and compare the ex post reward mechanism with the ex ante reward mechanism in forward versus discard and QoS routing. Our simulation results point out that the ex post reward mechanism is better than the ex ante reward mechanism in forward versus discard; however, the opposite holds true in QoS routing when the expected number of periods is sufficiently large. In addition, this study considers the reward mechanisms and the platform provider’s benefit to find the optimal number of supernodes in a transmission path.     

Pricing display ads and contextual ads: Competition,acquisition, and investment

Most websites are simultaneously supported by display advertising and contextual advertising. In this paper, we develop an economic model to examine the profitability of these two ad types in both a monopolistic market and duopolistic market, identifying the influence of impression benefit and click benefit. We find that in the duopolistic market a rival channel’s professional ability to enhance a visitor’s impression is beneficial to the channel offering contextual advertising. We also find that the strength of a search engine is limited in the duopolistic market; therefore, acquisition becomes a prime strategy to reveal the value of contextual advertising.