Research On Game Model Of Loyal Customer Scoring On Influencing Commodity In Purchasing Decisionmaking

With the increasing development of e-business,online consumer reviews show strong effects on long-term purchasing process.This research investigates how the seller's and the consumer's decision-making occurs on product price and purchasing through the existence of the loyal customers in the e-business by constructing game-theory models.This dissertation analyzes three models that involve the combined effects of the average ratings and the variance of customers' ratings on the demand of products in both sellers" and consumers" decision-making process.The goals of the thesis are summarized as follows:it reviews the research findings of current literature and analyzes applications of previous models in marketing science;this work analyzes how the combination of average rating and variances of consumers' ratings influences the decision-making process on price and demand by constructing the corresponding game-theory models.Based on the literature and the research purposes mentioned above,the thesis starts with summarizing and concluding the current research findings.The author then analyzes the advantages of online purchasing and the main factors impacting the purchasing in e-business from consumers'perspectives.After exploring the customer ratings of the products,the author proposes the research framework.The key problem is to analyze the effects of the combination of the average rating and variance of customers'ratings in the decision-making process.Firstly,the dissertation investigates the combined effect of the average rating and variance of customers' ratings on price and demand in the decision-making process in the existence of different preferential loyal customers(prestige-and quality-loyal customers).The author constructs a corresponding game-theory model.The analysis shows that both sellers and consumers can make certain decisions if and only if they perceive the information contained in the combination of the average rating and the variance of ratings submitted by loyal customers.The findings obtained are listed here:a higher average rating&higher variance increase price,demand,and profit;a lower average rating&higher variance increase price,demand,and profit;a higher average rating&lower variance increases price,demand,and profit;a lower average rating&lower variance decreases the price,demand,and profit.Furthermore,the author also finds that for the products with a similar average rating but highly different variances,the effects of average rating&variance in both seller and consumer decision-making are also different.The theoretical results derived from the constructed model is evaluated by the real data collected from Amazon website,which shows that the sellers' pricing strategies and consumers' demands vary considerably between two products with similar average ratings but different variances of rating distributions.Secondly,the author extends the game-theory model to study the combined effects of average ratings and variance of customers' ratings on price and demand in the decision-making process in existence of different preferential loyal customers(price-and quality-loyal customers)and how the effect changes on the product categories based on customers" purchasing frequencies(frequently-and infrequently-purchased products).The extended model shows that:first,a higher average ratings&higher variance implies low quality for frequently-purchased products and unreliable quality for infrequently-purchased products;a lower average rating&higher variance indicates low quality for products in both categories;a lower variance confirms high or low quality for both product categories with a similarly high or low average ratings.Secondly,a higher average rating&higher variance has a stronger impact on frequently-purchased products than infrequently-purchased products,which increases demands and profits;a lower average rating&higher variance has a stronger impact on infrequently-purchased products than frequently-purchased products,which increases demands and profits.Thirdly,a higher average rating&higher variance has a more direct effect on price for frequently-purchased products,and a lower average rating&higher variance on infrequently-purchased products.Lastly,the decision-making of consumers and sellers on price and demand are significantly different towards products with different purchasing frequencies.The theoretical result derived from the constructed model is evaluated by the real data collected from Amazon website,which shows that the sellers'pricing strategies and consumers'demands vary considerably between two products with different customer purchasing frequencies.Finally,the author studies the combination of the average rating and variance of the branded product's previous version,which leads a chain effect on the price and the demand for the product's next version,along with the decision-making process in a market of the loyal customers.The research approach is stated based on assumptions that how the combined effects of the average rating and the variance of the ratings represent the loyal customer's preference with their different interests and tastes.The findings of the study are listed here:first,a higher average rating&higher variance of product's previous version increases price,decreases demand and increases profit in the early sale period of the products" new version.A higher average rating&lower variance increases price,demand,and profit.Second,a lower average rating&lower variance of product's previous version decreases price,demand,and profit in the early sale period of the products" new version.A lower average rating&higher variance increases price,demand,and profit.Third,there is a significant difference in the decision-making on the price of the two products" new version when that products" previous version received similarly-average ratings and higher variance.The theoretical results derived from the model shows that the chain effects of the average rating and the variance play an increasingly important role in explaining the decision-making process of the sellers and consumers on the launching price and the demand for the branded product's new versions.The theoretical result derived from the constructed model is evaluated by the real data collected from Amazon.It shows that the sellers'pricing strategies and consumers' demands vary considerably between two similar new brands,when their previous versions received similar average ratings but different variances of rating distributions.In conclusion,the dissertation investigates the decision-making process of loyal customers in e-business.Based on different assumptions,the author constructs different game-theory models to analyze the effects of customers'ratings on the decision-making of customers and sellers.The results derived from game-theory models,firstly shows that the rating play an important role in consumers' and sellers" decision-making process to reduce information asymmetry in a market of different preferential loyal customers.Secondly,the role of ratings in the decision-making process has significantly changed towards products according the customers buying frequency.Finally,the ratings of the products" previous versions have played as a chain effect in the decision-making for the products" new versions.The theoretical results obtained from the constructed models are evaluated by the real data collected from the Amazon website.