Effects of pricing schemes and platform types on platform-based logistics services

Abstract

This study investigates the optimization of cooperation between B2B platform and 3PL for platform-based logistics services. In view of two pricing schemes (i.e., reseller and MSP modes) and two platform types (i.e., decentralized and centralized platforms), we use game theory and propose four pricing models to explore the interactions between the platform and 3PL under different scenarios. Optimal solutions of four analytical models are provided. By comparison analyses, we evaluate the effects of pricing schemes on the service prices and performance of both players. We find that the switch from the reseller mode to the MSP mode does not influence the service price of decentralized platforms, but it increases that of centralized platforms. The decentralized platform always chooses the MSP mode to improve profit, whereas the centralized platform will adopt the reseller mode to achieve higher social welfare. Conversely, their logistics partners have the opposite preferences. We also evaluate the effects of platform types on service prices. Results show that users of the centralized platform can pay less on logistics services than those of the decentralized platform. In addition, the preference of 3PLs on platform types is significantly influenced by the loyalty type of users and their attitude to the platform channel.