Resale Market And Social Learning:Dynamic Pricing Of New Experience Goods

Consumers can only determine whether the experienced product is suitable for themselves after buying the product,which raises the threshold for consumers to buy the product.However,the resale market with the help of platform has greatly alleviated the uncertainty of product applicability.But on the other hand,firms have to face the competition with the resale market.What's more interesting is that the information generated by consumers themselves has become the main reference for consumers to decide whether buy or not.In the same way,firms can also read the product reviews of consumers,to understand the market demand more accurately.Both firm and consumers have to update the product information through product reviews.But how should firms formulate sales strategy? Especially when there exists a resale market.Considering the applicability of consumers' uncertain experience goods,this study describes the heterogeneity of consumers' perception of product value and applicability,through the construction and analysis of consumers' utility function,this study constructs a consumer choice model,and on this basis,we explore the optimal decisionmaking and profit of monopoly firm in two-stage sales of experience goods.This thesis finds that when the difference between resale products and new products is large or the initial application probability of products is high,the emergence of resale market will improve the profit of firm.Interestingly,when consumers are very patient,firm's profit will also be improved.This paper further discusses the impact of social learning on firms,and finds that under "noise information",independent with consumers' patience and resale market,social learning will always improve the profit of firm.However,when firm and consumers can get more accurate product application information through product reviews,social learning does not always improve the profits of firm.When the production cost is low,determining product applicability through product reviews will damage corporate profits.