Research On Product Pricing Of Online And Offline Retailers Considering Reference Price Effect

In both online and offline sales environments,consumers have easy access to relevant product information,which further deepens their reference price dependence and creates a reference price effect.On one hand,the reference price effect exacerbates the showroom behavior of consumers who visit offline stores to experience products before making purchases online.This behavior turns offline stores into mere exhibition halls for e-commerce platforms,undermines the enthusiasm of offline retailers to provide services,and ultimately affects the healthy development of the entire market.On the other hand,the reference price effect intensifies consumer market observation behavior,making online and offline retailers face uncertain market demand.Therefore,in the competitive online and offline environment,it is essential to clarify the impact of the reference price effect on the pricing decisions and revenue of retailers and formulate appropriate product prices to ensure the coordinated operation of the market.Based on summarizing and organizing relevant research results at home and abroad and drawing on relevant achievements in the field of reference price effects,this article applies theories and methods such as revenue management and game theory to analyze to analyze pricing decisions for online and offline retailers considering reference price effect.First,in the competitive market environment between online and offline retailers,considering the external reference price effect stimulated by the external information such as the suggested retail price provided by retailers,this study builds a duopoly pricing game model based on the Hotelling model.The impact of external reference prices on retailers’ pricing decisions and revenue is analyzed in four scenarios: both online and offline retailers provide external reference prices,neither of them provide external reference prices,and only one of them provides external reference prices.The study shows that the external reference price effect has a unidirectional promotion effect on online and offline retailers under the competitive online and offline environment.Although the external reference price effect has a positive impact on online and offline retailers,it also triggers a new round of reference price competition.Showroom costs are an important factor affecting whether retailers provide reference prices to consumers.Second,in the competitive sales environment where online retailers invade the offline market,considering the internal reference price effect formed by the early sales prices of offline retailers,this study builds a two-period dynamic game model of online and offline retailers’ market competition and analyzes the impact of the internal reference price effect on their optimal pricing decisions,market demand,and expected revenue.The mechanism by which the internal reference price effect affects consumer market observation behavior is determined by changes in market demand.The study explores the optimal pricing decisions of online and offline retailers regarding market invasion and counter-invasion.The results show that under the influence of the internal reference price effect,online retailers’ market invasion can expand the total demand for products but always damages the interests of offline retailers.The internal reference price effect makes consumers’ purchasing behavior more strategic,which brings greater premium space for online retailers while squeezing the profit space of offline retailers.Under the influence of the internal reference price effect,the market invasion and counter-invasion decisions of online and offline retailers depend on the evaluation cost of online products.