Research On Pricing Of Online Retailer Based On Signal Game

As China's mobile Internet continue to gain popularity and mobile payment is increasingly perfect,consumers are increasingly willing to purchase the products they need online.Therefore,the online retail industry has developed rapidly.On the one hand,online shopping brings convenience to consumers.On the other hand,consumers are also faced with greater product quality uncertainty than offline shopping.This has a great influence on consumers' purchase intention.In order to obtain greater profits,online retailers need to think about how to promote consumer trust in the quality of their products.Therefore,this thesis will study the pricing decisions of online retailers of different quality types based on signal games.First of all,according to the difference in the levels of consumers' understanding of product quality,consumers are divided into experts and followers.Then,sales volume is used as a quality signal to convey product quality information to consumers in this thesis.And focusing on the two cases of undisclosed sales and open sales,how online retailers use price and sales signals to maximize profits.This thesis analysis indicates that due to the asymmetry of online shopping market information,retailers of different quality types can choose to set a high price or a low price.This will lead to three different situations.i.e.,separation equilibrium,sub-segregation equilibrium and mixed equilibrium.In addition,high-quality retailers are more willing not to disclose sales when online consumers fully believe in the quality of their products.It is also found that sales and prices are very effective quality signals,and that when retailers sell their products online,the higher-priced retailers have higher sales for products with higher discrepancies in consumer reservation price.Finally,this thesis points out that online retailers can increase profits not only by reducing product costs but also by other methods.For example,by facilitating the transformation of following consumers to expert consumers,innovating product features to increase consumer reservation price for high-quality products,and better use of sales signals,etc.In summary,this thesis explains some special phenomena in the online retail industry and provides decision-making advice for online retailers selling different products,which has certain practical and theoretical significance.