Group Buying Pricing Strategy for Duopoly Merchants Based on Bertrand Model
This paper studies the term group buying pricing strategy for duopoly merchants based on Bertrand model with the static pricing mechanism.First,we consider the pricing decision when both merchants do not adopt the group buying,so the merchants only have the traditional store sale channel,and the optimal store prices are obtained.Then,we consider one of the duopoly adopts the group buying,so this merchant has two sale channels:store and grouping buying.We obtain his optimal group buying price,and prove that the optimal group buying price is an increasing function of the customer transfer ratio and the commission ratio charged by the group buying website.At last,an example shows the optimal store prices and the group buying price for the duopoly,and analyzes the sensitivities of the store prices,grouping buying price,the sales volume and the profits on the key parameters.Finally we conclude that adopting group buying business can increase demand and profit for the merchants,and can realize a win-win situation both for the merchants and the customers.