| With the advancement of information technology and the popularity of Internet,the online retailing industry has developed rapidly all over the world,especially in China.Online firms have to face new challenges and need new management theories to guide them.Pricing and customer service,as two important strategies of a firm,have attracted more and more attentions of researchers.In this thesis,I extract three typical characteristics of the online selling: the high customer returns rate,the important effect of online reviews on customers’ behaviors and the fierce competition in the online market.Based on these characteristics,I focus on how online firms make decisions on the returns policy and price.It is worth noting that I utilized some tools such as optimization theory,customers’ utility and game theory in my study.The main work and its contributions are summarized as follows.Firstly,I study the mixed after-sales service which includes the return and replacement services.I model the decision of the online firm on pricing and ordering in the situation where two exclusive after-sales service policies and a mixed service policy are offered,respectively.I find that the mixed after-sales service can successfully segment the market,meet various customers distinct needs and differentiate the service prices to improve the total profit.Moreover,I find the boundary values which indicates the optimal interval for each service.Then,for a certain situation,I can clearly tell which after-sales service dominates and provides the optimal selling price,order quantity and total profit.Besides we show the impact of different parameters on the boundary values and other results.Secondly,I develop a monopoly model to examine how online reviews influence the decisions of online firm on the returns policy and pricing.I find that the return policy of the online firm is significantly changed in the presence of online reviews under certain conditions of customers’ hassle cost and the probability of product fitness.If the probability of the product fitness is high,the online seller are more likely to offer a leisure returns policy,otherwise,the online seller are more likely to offer a limited return policy.If the informativeness of online reviews is high enough,the online seller can benefit from the online reviews,when the customers’ hassle cost is in a middle level.In addition,when the online seller offers a full refund policy,the profit of online seller decreases with customers’ hassle cost.However,the profit of online seller increases with the informativeness of online reviews only if the probability of the product fitness is high,although the decrease of customers hassle cost and the increase of the online reviews’ informativeness both reduce customers’ risk on purchase.Finally,I develop a duopoly model to examine how online reviews influence the decisions of two competing online sellers who sell products with heterogenous quality: high quality and low quality.I find that the availability of online reviews reduces the customer’s need for a full-refund policy.I also show that the impact of online reviews on the price,demand,and profit of each seller,either positive or negative,depends on the relative valuation of reviews for their own product relative to that of the rival’s product.In addition,as compared to the impact of the competitor’s reviews,the impact of the seller’s own reviews is larger for the highquality seller than for the low-quality seller.Online reviews have different impacts on the seller when it offers different returns policies.If the salvage value of the product is relatively low,the seller has less opportunity to benefit from online reviews when it offers a full-refund policy,as compared to offering a no-refund policy.The impact of online reviews on the competition between two sellers has a“symmetric effect area,” where reviews may weaken the price competition between the two sellers when they both offer a no-refund policy,while intensifying the competition if they both offer a full-refund policy. |
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