Commission Rates Research Articles

Online travel agency or blockchain-based platform?

Online travel agency has been used by most hotels to attract customers. However, hefty commissions and unverified reviews reduce hotels' cooperation intentions. Armed with unique advantages, blockchain-based platforms with higher blockchain-adoption costs can alternatively offer peer-to-peer booking service. This paper investigates the hotels' choice strategies on online travel platforms, blockchain-adoption conditions, and effects of blockchain-based platform. The results show that marginal blockchain cost, commission rate and customers' perceived distrust value of online reviews have great influence on the hotels' decisions. Although blockchain-based platforms can create win-win situations for hotel(s) and customers, they are not widely available as it is considered imperfect and costly. Alarmingly, there exists an invalidation effect of online travel platforms in a competitive market, resulting in non-equilibrium.

Accuracy Assessment of NOAA IMS 4 km Products on the Tibetan Plateau with Landsat-8 OLI Images

The NOAA IMS (Interactive Multisensor Snow and Ice Mapping System) is a blended snow and ice product based on active and passive satellite sensors, ground observation, and other auxiliary information, providing the daily cloud-free snow cover extent in the Northern Hemisphere (NH) and having great application potential in snow cover monitoring and research in the Tibetan Plateau (TP). However, accuracy assessment of products is crucial for various aspects of applications. In this study, Landsat-8 OLI images were used to evaluate and validate the accuracy of IMS products in snow cover monitoring on the TP. The results show that (1) average overall accuracy of IMS 4 km products is 76.0% and average mapping accuracy is 88.3%, indicating that IMS 4 km products are appropriate for large-scale snow cover monitoring on the TP. (2) IMS 4 km products tend to overestimate actual snow cover on the TP, with an average commission rate of 45.4% and omission rate of 11.7%, and generally present that the higher the proportion of snow-covered area, the lower the probability of omission rate and the higher the probability of commission rate. (3) Mapping accuracy of IMS 4 km snow cover on the TP generally is higher at the high altitudes, and commission and omission errors increase with the decrease of elevation. (4) Compared with less regional representativeness of ground observations, the spatial characteristics of snow cover based on high-resolution remote sensing data are much more detailed, and more reliable verification results can be obtained. (5) In addition to commission and omission error metrics, the overall accuracy and mapping accuracy based on the reference image instead of classified image can better reveal the general monitoring accuracy of IMS 4 km products on the TP area.

Pricing Strategies for O2O Catering Merchants Considering Reference Price Effects and Unconditional Coupons

Coupon marketing is an important promotion model for the O2O catering supply chain. As a well-known catering O2O platform in China, Meituan provides its members with the opportunity to buy unconditional coupons at low prices, and it is very popular with consumers. It is worth studying how catering merchants develop pricing and promotion strategies considering consumers’ reference price effects in two scenarios: participating and not participating in coupon stacking (S-PICS/S-NPICS). In order to explore the pricing mechanism of meals, two models using Stackelberg games are established considering some exogenous variables, such as commission rate, reference price, and sensitivity of consumers to coupon prices. The results show that (1) the reference price has a great influence on the maximum profits of catering merchants, varying in different scenarios; (2) in S-NPICS, the merchants’ maximum profit increases with an increase in the reference price, while, in S-PICS, an increase in the reference price leads to a decrease in merchants’ maximum profit; (3) the profit of merchants in S-PICS is higher than that in S-NPICS, indicating that merchants can benefit from coupon stacking; (4) when the commission rate of the coupons increases, the merchants in both S-PICS and S-NPICS should raise their online meal prices to obtain higher profits. This study provides a balanced reference for pricing strategies and coupon promotion strategies in different scenarios through the use of deduction and simulation methods, which is conducive to the sustainable development of the O2O catering supply chain. As consumers enjoy using these coupons, including unconditional ones, it is suggested that merchants and Meituan should focus on coupon promotion and develop better dining pricing strategies.

Brand livestream mode options: AI vs KOL livestream in the platform supply chain

PurposeDriven by the rapid expansion of online retail and the surge in livestream commerce, the impact of different livestream mode on brand and platform performance has become a critical issue. This paper analyzes the impact of artificial intelligence (AI) and key opinion leader (KOL) livestream on the profitability of brands and the platform, incorporating the effects of horizontal interactions to identify the optimal livestream mode.Design/methodology/approachThis paper develops a model of a platform supply chain involving two brands and a platform, where each brand independently decides whether to utilize KOL or AI livestream. Applying Stackelberg game approach, the study derives equilibria for various livestream scenarios, identifying the optimal livestream mode for both parties. Additionally, the model is extended to incorporate asymmetric market potential and network externality to evaluate their impact on a brand’s choice of livestream mode.FindingsSeveral interesting and important results are derived in this paper. Firstly, it is found that AI livestream enables brands to leverage network externality and mitigate the market disadvantage, thereby gaining a competitive advantage. Secondly, while KOL livestream promotes trust, the medium KOL commission rates could cause brands to be trapped in a prisoner’s dilemma, and excessively high commission rates may render them less profitable. Thirdly, the KOL commission rate, network externality intensity, horizontal interactions and market disadvantage are critical determinants influencing a brand’s choice of livestream mode.Originality/valueThis study is the first to investigate the effects of horizontal interactions, asymmetric market potential and asymmetric network externality on livestream mode selection by brands within a platform supply chain. The research provides valuable insights into optimizing livestream strategies to enhance brand profitability.

Differential Games between a Brand Manufacturer and an Internet Celebrity Regarding Fairness Concerns

With the rapid growth of social media and live-streaming technology, live-stream selling has become integral to the digital economy. Using differential game theory, this paper examines how fairness concerns impact the profits of internet celebrities and brand manufacturers under the “pure commission” model. We analyzed no fairness concern, gap fairness concern, and self-due fairness concern models, to investigate the optimal decisions and corresponding profits for an internet celebrity and a brand manufacturer. The results show that the internet celebrity earned the highest profits with low commission rates under the self-due fairness concern model, whereas higher commission rates yielded higher profits for the internet celebrity under the gap fairness concern model. Simultaneously, fairness concerns significantly affected the cooperation stability and long-term benefits, motivating the internet celebrity to maintain efficient collaborations with the brand manufacturer. Furthermore, the self-due fairness concern model was more practical than the gap fairness concern model.

Selling mode choice and return policy for advance selling in an e-commerce platform with social influence

Advance selling is increasingly employed to mitigate demand uncertainty, raise consumer awareness of products, and even exert social influence on subsequent sales. However, consumers may hesitate to pre-order products due to uncertainty about product valuation. As a response, sellers have begun implementing return policies and utilizing online retail platforms to alleviate the uncertainty. This study aims to investigate the interaction between return policies for advance selling and selling formats of e-commerce platforms considering the impact of social influence. We examine a two-period platform supply chain that includes agency selling, reselling, and hybrid selling formats with and without return policies. Using game theory models, we analyze pricing decisions and profits of each player under six possible scenarios. The results indicate that the manufacturer consistently prefers adopting a Money-Back Guarantee (MBG) return policy regardless of the selling format. However, the MBG return policy is not always advantageous for the platform, except in the case of low social influence. In such a case, the platform may implement the MBG return policy to boost advance sales, thereby enhancing the penetration power from advance sales to regular sales. Regarding selling formats, the platform and the manufacturer opt for the reselling and agency selling, respectively, when the commission rate is low; otherwise, they adopt the agency selling and hybrid selling, respectively. Furthermore, we explore the impact of critical drivers on the pricing decisions and profits within the platform supply chain. Our study offers valuable insights into implementing return policies and determining selling formats.

Effects of online-to-offline spillovers on manufacturers’ online sales mode selection

Numerous studies have confirmed the existence of two types of spillover effects (i.e., negative or positive spillover) from online sales to offline sales. The manufacturer’s chosen strategy for sales mode can be challenging and complex when considering online sales efforts and spillover effects. With positive spillover, enhancing online sales efforts not only increases online demand but also stimulates offline demand. Conversely, with negative spillover, an increase in online sales efforts boosts online sales while simultaneously cannibalizing offline sales. This paper analyzes the manufacturer’s choice between reselling and agency selling modes and investigates how both positive and negative spillover effects influence the manufacturer’s choice when considering online sales efforts. We demonstrate that, with a significant positive spillover, agency selling is the manufacturer’s optimal strategy. Counterintuitively, we show that the larger the negative spillover, the more the manufacturer prefers reselling. Furthermore, when the negative or positive spillover is relatively low, the manufacturer’s decision regarding the sales mode depends on the commission rate. Moreover, our study highlights that the optimal selling strategy for the manufacturer is affected by consumers’ sensitivity to online sales efforts. We also find that when considering online sales efforts, in scenarios where there is a significant positive spillover, the manufacturer is better off adopting agency selling. Meanwhile, the manufacturer may obtain negative profits from the online channel but can be compensated by the profits made from the offline channel. We extend the model to consider online sales efforts provided by the online platform in two selling modes, demonstrating the robustness of our main outcomes.

Pricing model of ride-hailing platform considering rationally inattentive passengers

ABSTRACT The ride-hailing services are booming in our daily lives, but it is unclear that how the platforms should set prices to maximize their profits when facing one kind of rationally inattentive passengers in a two-sided market. To fill this gap, we establish a profit maximization model for the ride-hailing platform based on queuing theory and rational inattention theory and analyze the properties of the model. Numerical examples are presented to demonstrate the impacts of perceived high and low service levels, information cost and prior belief on the optimal price and commission rate of the ride-hailing platform. The results show that (1) for different cities, there is always an optimal pricing strategy to maximize the profit of the platform. (2) To ensure maximum profit, the platform should disclose the service information of ride-hailing as much as possible, but also maintain the unknownness of ride-hailing services appropriately.

The interaction between manufacturer’s showroom deployment and online selling formats

Many manufacturers selling through online retail platforms are deploying physical showrooms to facilitate consumers’ learning about their products. To uncover the effects of the manufacturer-deployed showrooms on participants in a platform-based distribution channel, we establish a game-theoretic model wherein a manufacturer sells through an online retailer under either agency selling or wholesale selling, and consumers decide sequentially on showrooming and purchasing. We find that, firstly, despite the merits of showrooms in resolving consumers’ valuation uncertainty, the deployment of showrooms may unexpectedly engender more product returns (i.e., return exacerbation effect), which hurts the retailer under wholesale selling when the consumers’ travel cost is moderate. Second, the manufacturer under each selling format tends to benefit (suffer) from showrooms in the case of low (high) travel cost; in addition, the decrease in commission rate boosts the gain from showroom deployment, making the manufacturer under agency selling more likely to deploy showrooms, especially when the travel cost is moderate. Third, in anticipation of the manufacturer’s (not) deploying showrooms and the corresponding profit impacts, the channel members may adopt varying preferences for the selling format. Notably, they have aligned preferences for agency selling with medium low commission rate, while neither prefers agency selling with relatively high commission rate and travel cost. This study sheds light on the flourishing practice of manufacturer-deployed showrooms, clarifying their impacts on the platform-based distribution channel.

Brands’ Livestream Selling with Influencers’ Converting Fans into Consumers

Livestream selling is booming in the digital economy era. In practice, for the benefits such as consumer utility enhancement and the reduction of supply-preference mismatch, many brands are adapting their strategies to livestream selling, wherein some brands cooperate with top influencers to livestream as they can exert efforts to convert the fans into consumers. By contrast, some other brands choose to livestream by themselves to save the commission cost for the influencer, even at the expense of losing fan consumers. In this study, we characterize brands’ key tradeoffs between top influencer-livestream and self-livestream selling strategies. We find that a higher commission rate can incentivize the influencer to exert more efforts to convert fans, but also harms the brand by reducing the proportion of the livestream profit allocated to it and inhibiting it from transferring commission cost to consumers. Therefore, the brand may (not) be suggested to cooperate with the influencer when the commission rate is at a moderate (either low or high) level such that the twofold impacts of the commission rate are balanced (imbalanced). For consumers, their surplus may first decrease and then increase with the influencer commission rate. Our study deepens the understanding of the roles of top influencers and their fans in livestream e-commerce operations.

Equilibrium analysis of the seller’s fulfillment channels and sales channels

Sellers’ products can be sold either through platform channels or through their own channels. Also, sellers’ orders can either be fulfilled by platforms (FBP) or be fulfilled by third-party merchants (FBM). We consider a platform and a representative seller that compete in selling two substitutable products. We develop an analytical framework for identifying each firm’s structure preference by comparing four modes: own channel with FBP (Mode OP), own channel with FBM (Mode OM), platform channel with FBP (Mode PP), and platform channel with FBM (Mode PM). Our research establishes several insights. When the seller’s products are sold through either his own channel or the platform channel with a low commission rate, the platform always prefers to provide fulfillment services for the seller – who may be unwilling to accept that service. In contrast, when the seller’s products are sold through the platform channel with a high commission rate, the platform has more incentive to “protect” the seller’s profit by offering (resp. not offering) fulfillment services to him when he prefers FBP (resp. FBM). These outcomes indicate that the likelihood of platform and seller agreeing on a fulfillment channel for the seller’s orders is strongly affected by the commission rate and the seller’s sales channel. Besides, even though the platform is always willing to provide sales channels for the seller, a seller’s acceptance of that offer is influenced by his own fulfillment channels. Finally, our analysis reveals that the only possible win–win equilibrium structures for the platform and the seller are Mode PP and Mode PM.

Pricing strategy and its impact on the effort of community leader and platform: Uniform or differentiated pricing?

This paper is motivated by the rapid development of community group buying (CGB), where the CGB platform dramatically relies on the community leader to provide last-mile services and fulfill consumers’ orders. Considering two types of community leaders, the friend role and seller role, this work adopts a game-theoretical model and investigates how the pricing strategy, uniform pricing strategy (N) or differentiated pricing strategy (Y), affects players’ performance and decisions on effort level. This study shows that the commission rate is an essential factor in stimulating the role transformation of community leaders. A significantly large commission rate results in the friend role community leader with lower trust value changing into the seller role. Generally, the community leader works harder under the uniform pricing scenario except in situations with a significant commission rate and moderate sensitivity coefficient of trust value. However, the effort level of the platform is jointly influenced by the pricing strategy, commission rate, and the role of a community leader. Moreover, regardless of the commission rate, when the community leader is a friend role and the trust value is high, both the platform and community leader can gain higher profits under the uniform pricing scenario than the differentiated pricing case. It indicates that a win–win situation can be achieved.

Agency or reselling: optimal return policy in E-commerce retail systems under cap-and-trade regulation

In recent years, the government has issued regulations on environmental protection, carbon emissions, and trading. Enterprises’ environmental awareness has increased, and the operational strategies of manufacturers and platforms have also been affected by environmental regulations. This study considers the interactive effects of agency and reselling contracts between manufacturers and platforms and the cap-and-trade regulation on return policy. Our findings reveal that government-imposed caps on total carbon emissions consistently influence optimal pricing and profits under cap-and-trade regulation, regardless of the presence of a return policy. Additionally, the emission intensity of manufacturers plays a pivotal role in determining the return policy. High manufacturer emission intensity leads decision-makers to provide return services only under specific conditions. Moreover, manufacturers opt for agency contracts when faced with low commission rates, and this threshold is intricately linked to carbon emission intensity, the cap, and the return rate. The government’s ability to adjust the cap enables control over changes in manufacturers’ profits and output, thereby influencing industrial structure and carbon emissions. Manufacturers strategically choose return policies, considering factors such as carbon intensity, return rate, and commission rate. Remarkably, even under cap-and-trade regulations, manufacturers remain inclined to offer returns under optimal conditions.

Pricing Decision and Cancellation Strategy Selection of ''Hotel+Online Platform''

Based on the consumer's cancellation behavior, a “Hotel + online platform” dual-channel supply chain model consisting of a single hotel and a single online platform is constructed, based on the theory of consumer utility, this paper constructs the demand for rooms in the supply chain, and analyzes the profit of the hotel side, room pricing and cancellation strategy under the competition-cooperation relationship by using the Stackelberg game model. The research shows that in the hotel's dual-channel supply chain, the selection of unsubscribing strategy for official direct sales channels and online agency platforms and the pricing of rooms are affected by the probability of unsubscribe, the cost of unsubscribing, consumers' preference level for online platforms and commission rates; when both direct sales channels and online platforms adopt non-unsubscribe strategies, the profits and pricing of both parties are independent of the cost of unsubscribing. When the hotel direct sales channel adopts the unsubscribed strategy, then the room price increases with the increase of the cost of unsubscribing; at the same time, when the online platform chooses the unsubscribed strategy, the preferential amount is decreases with the increase of the cost of unsubscribing; on the contrary, it increases with the increase of the cost of unsubscribing. When consumers have a high preference level on the online platform, the strategy is the optimal strategy.

Does the Dual Representation System of Player Agents in International Football Benefit Players? An Economic Analysis

It is common in international football for the same agent to be paid both commission fees by the purchasing club for negotiating a player salary and a transfer fee. This dual representation creates a potential conflict of interest for the agent. The agent may not negotiate the highest salary for the player if a higher salary reduces the likelihood of a successful transfer by lowering the resources available for the transfer fee. We construct a gamble model of the transfer process and simulate the ex-ante agent commissions rates, expected player salary, transfer fee and club profit under the assumption of dual representation where the buying club pays all agent commissions. The assumption that the quality of the agent increases with the commission rate is essential to the model. Both the player and the club are better off when the club pays both commissions, however the agent is worse off.

Game-theoretic implications for uncovering the effects of virtual tipping in complex user networks

Consumer-generated media (CGM), including social live streaming service (SLSS), often incorporate gamification elements to engage users. Online virtual tips and gifts, such as “bits” in Twitch, exemplify this approach by fostering interactive dynamics between live streamers and their audience. However, issues remain in understanding the impact of (virtual) tips on user behavior and how platform commissions, which are partly collected from the tips provided by other users, influence the platform’s overall revenue and user behavioral strategies. This study considers a CGM/SLSS platform, such as Twitch, as a variation of the public goods game and proposes a game-theoretical model integrated with a platform-mediated tipping system with a certain commission rate. In experiments, the proposed model was applied to artificial and actual SLSS networks, demonstrating that the influence of a tipping system on user behavior is significant, impacting the motivation for live streaming and the effort to improve its quality. Depending on individual preferences for psychological or monetary reward, the commission rate is determined by the platform depending on the users’ network positions, such as the degree of connectivity, which corresponds to the number of followers/followees in SLSS networks. Our findings offer valuable insights into the design and management of SLSS platforms and further suggest that there may be an appropriate commission rate to maximize platform revenue.

The underwriter's conflict of interest and earnings forecast bias in prospectus: Evidence from Hong Kong

About 40% of the firms that go public on the Hong Kong Stock Exchange voluntarily include earnings forecasts in their prospectuses. These forecasts are on average biased downwards by 8% compared to the realized earnings. We hypothesize that the underwriter, in order to increase IPO underpricing and obtain private benefits, pressure managers to low-ball earnings forecasts in the prospectuses. We examine the effect of underwriting commission rate, reputation, and IPO trading commissions on the earnings forecast bias in the prospectuses. We find that underwriting commission rate is negatively associated with the forecast bias. Using the 90-day post-IPO trading volume as a proxy for future trading commissions and profits generated from institutional investors and aftermarket trading activities in general, we document that trading commissions are positively associated with the forecast bias. Further analysis shows that underpricing is positively associated with the forecast bias, but the effect of the forecast bias on underpricing disappears after controlling for the underwriter's trading commission. Overall, these results are consistent with predictions based on the agency theories of underwriter by Baron (1982) and Loughran and Ritter (2002).

Settlement Selection Strategic Analysis for Self-Operated E-Commerce Platforms under Market Competition

This paper focuses on the settlement selection strategic analysis for self-operated e-commerce platforms on hybrid e-commerce platforms under market competition. Taking factors such as the market share, price competition, commission, and customer loyalty into account, a multi-leader–follower game model with the platforms as leaders and the manufacturers as followers is established. Then, we solve the model with the help of some mathematical techniques and describe some numerical experiments to analyze settlement strategies for the self-operated platforms and their impact on other members in the network. The numerical results reveal the following revelations: a lower commission rate is more suitable for the self-operated platforms; once the commission rates are determined, the self-operated platforms prefer to settle in the hybrid platforms under lower medium price competition; when the price competition is fierce, as customer loyalty increases, the self-operated platforms should settle with a low market share; if the self-operated platforms settle in the hybrid platforms, then a higher price competition is advantageous for all members and can facilitate supply chain coordination.

Sourcing Channel Decision in the Presence of Platform Encroachment with Quantity Competition

The decision of sourcing channels is a critical strategy for online retail platforms (ORs) when they encroach into the product market of the third-party retailers (3PRs). Whether the products of the OR are provided by the common supplier or the one different from that of the 3PR leads to different supply chain structures. This paper focuses on the sourcing channel decision of an encroaching OR given the sourcing channel of a 3PR. The OR may source either from the common supplier, i.e., the same supplier as that of the 3PR, or from a different supplier, i.e., one different from that of the 3PR. This paper develops two game-theoretical models to examine the sourcing channel decision of an OR in quantity competition with a 3PR on the platform. The results show that the OR’s preference for the sourcing channel is significantly affected by the production cost, product substitutability and commission rate. By comparing the performances of the OR under these two sourcing channels, we find that when the production cost of the different supplier is very low, or when the product substitutability of the different supplier is low, or when the commission rate is either very low or very high, the OR prefers to source from the different supplier. Otherwise, the OR tends to source from the common supplier. We also find that the OR’s encroachment into the sales market of a 3PR by sourcing from the common supplier will always hurt the 3PR, but the platform encroachment by sourcing from the different supplier will not necessarily hurt, especially when the supplier selected by the OR has a significant disadvantage in production cost compared to those of the 3PR. Furthermore, when the OR encroaches by sourcing from the common supplier, it becomes the largest retailer in the market; otherwise, the 3PR is the largest retailer in that market. Our results also indicate that platform encroachment by different sourcing can not only expand the sales market, but also weaken the negative effects of platform encroachment on the profit of the 3PR.

The triple optimal combination of selling format, service provision, and blockchain implementation in a platform-based supply chain

In a platform-based supply chain, an online platform can act as a reseller (R) or a marketplace (A) for the manufacturer. Under each selling format, sales services can be provided by the manufacturer (M) or the platform (I). Besides, facing the problem of counterfeits and consumer mistrust, the platform can implement blockchain as a solution (B) or not (N). The combination of selling format selection strategy, service provision strategy, and blockchain implementation strategy produces 8 models: NMR, NMA, NIR, NIA, BMR, BMA, BIR, and BIA. On this basis, we explore the interaction of the three strategies and obtain a triple optimal combination (TOC). We find that blockchain implementation is always beneficial to the manufacturer and consumers, but blockchain will only be implemented by the platform and be beneficial to society when certain conditions are met. Under the reselling format, the manufacturer always prefers to authorize services to the platform; under the agency selling format, the manufacturer decides on the service provider according to commission rates. Based on the double optimal equilibrium, we further analyze the platform’s selling format selection with the consideration of the manufacturer’s preference and draw some interesting conclusions: When the commission rate is moderate in the lower commission rate range, the TOC is the BMA model; when both the commission rate and service efficiency are higher in the lower commission rate range or when the commission rate is lower in the higher commission rate range and service efficiency is high, the TOC is the BIR model.