New products advance selling considering strategic customers

Abstract

Advance selling is a new business model, we study optimal advance selling inventory decision of two competing firms offering homogeneous new products on the advance selling platform considering strategic customers, we use Stackelberg and Cournot game model. This paper considers a two-period model, the first period is advance selling which is possible at a discount price, regular price or premium price, and the second period is regular selling. We show that:(1)The equilibrium inventory quantity and profits of retailer one in Stackelberg game are greater than Cournot game;(2)The equilibrium inventory quantity and profits of retailer one in Stackelberg game are smaller than Cournot game;(3)The total equilibrium inventory quantity in Stackelberg game is greater than Cournot game, the total equilibrium profits in Stackelberg game is smaller than Cournot game;(4)Strategic customers affect retailers' optimal profits and inventory quantity.