<p>The presence of both high and low-quality digital product suppliers in the market, such as digital maps, music, and software, results in low-quality products influencing customers’ perception of product quality. To counter the terrible effect caused by subpar digital products, our research identifies three strategies: platform-provided value-added services (IE), platform-driven quality investment in low-quality suppliers (IS), and independent quality improvement by low-quality suppliers (IB). These strategies intend to mitigate the adverse effects of low-quality products and enhance the consumer perceived quality. Our findings from game theory analysis reveal several interesting results. Firstly, we discovered that the three proposed strategies are effective in providing overall perceived quality. Both platforms and low-quality suppliers should focus on enhancing value-added services and investing in quality improvement. This not only benefits their interests but also elevates the overall product quality in the market. Secondly, although the implementation of value-added services and quality investment by platforms and low-quality suppliers may lead to increased market prices, customers perceive the benefits of these improvements, resulting in increased market demand. This emphasizes the importance of quality enhancement strategies. Furthermore, our research indicates that different quality improvement strategies employed by platforms and low-quality suppliers can simultaneously increase the profits of the platform, high-quality suppliers, and low-quality suppliers. This overall profit increase benefits the entire supply chain and leads to a Pareto optimal market.</p>

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The optimal pricing and quality improvement strategies for digital products under bilateral platform intervention

  • Zhitang Li,
  • Ruxia Lyu,
  • Xiran Lyu,
  • Henry Xu

摘要

The presence of both high and low-quality digital product suppliers in the market, such as digital maps, music, and software, results in low-quality products influencing customers’ perception of product quality. To counter the terrible effect caused by subpar digital products, our research identifies three strategies: platform-provided value-added services (IE), platform-driven quality investment in low-quality suppliers (IS), and independent quality improvement by low-quality suppliers (IB). These strategies intend to mitigate the adverse effects of low-quality products and enhance the consumer perceived quality. Our findings from game theory analysis reveal several interesting results. Firstly, we discovered that the three proposed strategies are effective in providing overall perceived quality. Both platforms and low-quality suppliers should focus on enhancing value-added services and investing in quality improvement. This not only benefits their interests but also elevates the overall product quality in the market. Secondly, although the implementation of value-added services and quality investment by platforms and low-quality suppliers may lead to increased market prices, customers perceive the benefits of these improvements, resulting in increased market demand. This emphasizes the importance of quality enhancement strategies. Furthermore, our research indicates that different quality improvement strategies employed by platforms and low-quality suppliers can simultaneously increase the profits of the platform, high-quality suppliers, and low-quality suppliers. This overall profit increase benefits the entire supply chain and leads to a Pareto optimal market.