Markdown and bundling pricing decisions for complementary supply chain with strategic consumers

Abstract

In this paper, we investigate the selling strategy and price decisions for a seller who provides two complementary products to the strategic consumer over two periods under three selling strategies: markdown pricing (MD), second period bundling (SPB) and first period bundling (FPB). It is found that the seller's optimal prices in the second period of SPB and FPB strategies are higher than that of MD strategy, the seller can obtain the maximum profit by FPB strategy, and obtain more profit in SPB strategy than that in MD strategy with some conditions. We also explore the effect of consumer strategic behavior and product complementarity on the seller's selling strategy and profit. The effects of consumers' strategic behavior and patience on seller's profit and selling strategies are analyzed by the numeral examples.