Research On Manufacturer's Pricing Strategies In The Presence Of A Downstream Sharing Platform

The rapid development of sharing platforms has brought significant impacts on manufacturers.On the one hand,sharing platforms cannibalize the market demands of manufacturers.On the other hand,sharing platforms have value-enhancement effects on products,thereby increasing the manufacturer's product sales.Such fluctuations in demands stemming from sharing platforms challenge manufacturers' decision-making in pricing strategies.Although extant literature has studied the impacts of sharing platforms on manufacturers' operational decisions,these researches are based on a long-term perspective,thus ignoring that in the short term demand-side consumers have flexibility in purchasing and that the interactions between the long term and short term due to the scale of product owners,and do not consider practical effects such as product/service sharing generating additional sharing utility,sharing platforms' business models,and the manufacturers' shareholdings in sharing platforms.In view of the shortcomings of existing literature,this dissertation studies how sharing platforms affect manufacturers' pricing strategies from three aspects.Specifically,first,when the scale of product owners is exogenous,this dissertation studies how a sharing platform affects a manufacturer's short-term pricing strategy;second,when the scale of product owners is endogenous and sharing brings sharing utility,this dissertation studies how a sharing platform affects a manufacturer's long-term pricing strategy and analyzes how the manufacturer's long-term pricing strategy affects its short-term pricing strategy;finally,when a manufacturer holds shares of a sharing platform's equity,this dissertation studies how the sharing platform affects the manufacturer's wholesale pricing strategy.By using analytical methods such as game theory,optimization theory,and numerical simulation,this dissertation establishes a short-term pricing game model,long-term pricing game model,and wholesale pricing game model,consisting of a manufacturer and sharing platform,and explores how the existence of the platform will affect the manufacturer's pricing strategy(i.e.,equilibrium outcome)under each model.The main conclusions of this research are as follows:First,in the short term,the short-term cannibalization effect of the sharing platform has a negative impact on the manufacturer's short-term price,but when the production cost is low or the production cost is high and the scale of product owners is small,the manufacturer can weaken the cannibalization effect of the sharing platform by adjusting its short-term price.A low production cost weakens the sharing platform's relative advantage in costs,while a smaller size of the product owners inhibits the cannibalization effect of the sharing platform,thus the manufacturer can achieve a sub-optimal result by adjusting prices.In addition,the manufacturer's short-term price increases in the sharing platform's commission rate but decreases in the scale of product owners.Second,from a long-term perspective,the manufacturer's long-term pricing strategy depends on the sharing utility brought by sharing and the shareability of shared products,and the long-term pricing strategy can affect the manufacturer's short-term pricing strategy to the sharing platform via the scale of product owners.Particularly,when the shareability is low and the sharing utility is high,the manufacturer will choose a lower long-term price to induce a larger size of product owners and thus strategically coexist with the platform.When the sharing utility is low,the manufacturer will choose a higher longterm price to induce a smaller size of product owners,thereby strategically preventing the sharing platform from entering the market.Furthermore,given the shareability,when the sharing utility is at a low level,the existence of the sharing platform has no impact on the manufacturer's operational decisions;when the sharing utility is at a moderate level,the existence of the sharing platform poses a threat to the manufacturer;when the sharing utility is at a high level,the existence of the sharing platform brings an opportunity to the manufacturer.In addition,when the sharing utility is at a sufficiently high level,an increase in the sharing utility will increase the manufacturer's long-term price and raises the profitability of the manufacturer and sharing platform.Finally,the manufacturer's optimal wholesale prices are affected by the usage rate and the service level of the sharing platform,and different optimal wholesale price strategies lead to different business models of the sharing platform.In particular,when the usage rate is low and the service level of the sharing platform is high,the manufacturer uses the optimal wholesale price to induce the B2 P sharing platform;when the usage rate and the service level of the sharing platform are both low,the manufacturer uses the optimal wholesale price to induce the P2 P sharing platform;when the usage rate is high,the manufacturer uses the optimal wholesale price to induce the hybrid sharing platform.Furthermore,when the equity investment is exogenous,as the manufacturer's shareholding proportion in the platform increases,the wholesale prices,sharing price,selling price,and platform's accounting profit will decrease,while the commission,manufacturer's accounting profit,retailer's operational profit and consumer surplus will increase.In particular,when the usage rate is moderate or the usage rate is low and the service level of the sharing platform is moderate,the manufacturer's equity investment will affect the sharing platform's business model.In addition,when the equity investment is endogenous,the equity transaction price of the sharing platform depends on the platform's business model and is positively correlated with the usage rate,but has a non-monotonic relationship with the service level of the sharing platform and the manufacturer's shareholding proportion;when the usage rate,the service level of the sharing platform and the equity transaction price are all at intermediate levels,there is an optimal manufacturer's shareholding scale in the sharing platform.The managerial implications of this research are: First of all,the existences of sharing platforms have changed manufacturers' market environments.Even in the short term,for manufacturers under some specific market conditions,it is necessary to adjust their pricing strategies to actively respond to sharing platforms,and the manufacturers' long-term price adjustments may further make them benefit from the existences of sharing platforms;secondly,manufacturers and sharing platforms should collaborate on improving sharing utility to a sufficiently high level by enhancing the sense of community belonging,fostering benefits from sharing activities,and addressing sustainability concerns,thereby achieving a win-win result;finally,for manufacturers,holding a certain percentage of the sharing platforms' equities can not only increase the manufacturers' accounting profits but also helps to improve the manufacturers' operating efficiency;for sharing platforms,equity financings from manufacturers can not only alleviate the shortages of operating cash,but also align the interests of the platforms and manufacturers,and thus being conducive to the development of platforms' business models.For regulators,manufacturers' shareholdings in sharing platforms will increase consumer surplus and social welfare.