• Previous Article
    Globally convergent algorithm for solving stationary points for mathematical programs with complementarity constraints via nonsmooth reformulations
  • JIMO Home
  • This Issue
  • Next Article
    Electricity spot market with transmission losses
April  2013, 9(2): 291-304. doi: 10.3934/jimo.2013.9.291

Analysis on Buyers' cooperative strategy under group-buying price mechanism

1. 

Research Center of Contemporary Management, Tsinghua University, School of Economics and Management, Tsinghua University, Haidian District, Beijing, China

2. 

School of Economics and Management, Tsinghua University, Haidian District, Beijing, China

3. 

Department of Systems Engineering and Engineering Management, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong

Received  April 2012 Revised  May 2012 Published  February 2013

Group-buying price is a new pricing mechanism originated from Internet bidding. It has been proved that, with this pricing mechanism, buyers' cooperation in a B2C environment is beneficial for both the seller and buyers. The contribution of this paper is two-fold. First, we formally prove that, when buyers' valuation on the product is transparent and known information, the optimal form of buyers' cooperation is to organize only one ``bidding ring'' with all buyers. Second, we study how cooperation with all buyers can be organized if each buyer's valuation of the product is private information not known to others. We find that there may not exist a feasible compensation mechanism such that all buyers will report their true values in the cooperative coalition. Given that buyers may hide some information and report a lower value, we show that it is still possible to organize the cooperation if the number of buyers with higher values is large enough.
Citation: Jian Chen, Lei Guan, Xiaoqiang Cai. Analysis on Buyers' cooperative strategy under group-buying price mechanism. Journal of Industrial & Management Optimization, 2013, 9 (2) : 291-304. doi: 10.3934/jimo.2013.9.291
References:
[1]

S. K. Anand and R. Aron, Group buying on the web: A comparison of price-discovery mechanisms,, Management Science, 49 (2003), 1546. Google Scholar

[2]

J. Chen, X. Chen and X. Song, Bidder's strategy under group-buying auction on the Internet,, IEEE Transactions on Systems Man and Cybernetics Part A-Systems and Humans, 32 (2002), 680. Google Scholar

[3]

J. Chen, X. Chen and X. Song, A comparison of the group-buying auction and the fixed-pricing mechanism,, Decision Support Systems, 43 (2007), 445. Google Scholar

[4]

J. Chen, X. Chen, R. J. Kauffman and X. Song, Should we collude? Analyzing the benefits of bidder cooperation in online group-buying auctions,, Electronic Commerce Research and Applications, 8 (2009), 191. Google Scholar

[5]

J. Chen, R. J. Kauffman, Y. H. Liu and X. Song, Segmenting uncertain demand in group-buying auctions,, Electronic Commerce Research and Applications, 9 (2010), 126. Google Scholar

[6]

R. J. Dolan, Quantity discounts: Managerial issues and research opportunities,, Marketing Science, 6 (1987), 1. Google Scholar

[7]

J. Feng, Optimal mechanism for selling a set of commonly ranked objects,, Marketing Science, 27 (2008), 501. Google Scholar

[8]

X. Jing and J. Xie, Group buying: A new mechanism for selling through social interactions,, Management Science, 57 (2011), 1354. Google Scholar

[9]

R. J. Kauffman and B. Wang, New buyers' arrival under dynamic pricing market microstructure: The case of group-buying discounts on the Internet,, Journal of Management Information Systems, 18 (2002), 157. Google Scholar

[10]

R. J. Kauffman and B. Wang, Bid together, buy together: On the efficacy of group-buying business models in Internet-based selling,, in, (2002). Google Scholar

[11]

P. Klemperer, "Collusion and Predation in Auctin Markets,", Working paper, (2001). Google Scholar

[12]

A. M. Kwasnica, "A Theory of Collusion in Multiple Object Simultaneous Auctions,", Working paper, (2002). Google Scholar

[13]

R. P. McAfee and J. D. McMillan, Bidding rings,, The American Economic Review, 82 (1992), 579. Google Scholar

[14]

W. J. Mead, A. Moseidjord and P. E. Sorenson, Natural resource disposal policy: Oral auction versus sealed bids,, Natural Resources Journal, 7 (1967), 195. Google Scholar

[15]

M. Pesendorfer, A study of collusion in first-price auctions,, Review of Economic Studies, 67 (2000), 381. Google Scholar

[16]

M. S. Robinson, Collusion and the choice of auction,, The RAND Journal of Economics, 16 (1985), 141. Google Scholar

[17]

A. Segev, C. Beam and J. Shanthikumar, Optimal design of Internet-based auctions,, Information Technology and Management, 2 (2001), 121. Google Scholar

show all references

References:
[1]

S. K. Anand and R. Aron, Group buying on the web: A comparison of price-discovery mechanisms,, Management Science, 49 (2003), 1546. Google Scholar

[2]

J. Chen, X. Chen and X. Song, Bidder's strategy under group-buying auction on the Internet,, IEEE Transactions on Systems Man and Cybernetics Part A-Systems and Humans, 32 (2002), 680. Google Scholar

[3]

J. Chen, X. Chen and X. Song, A comparison of the group-buying auction and the fixed-pricing mechanism,, Decision Support Systems, 43 (2007), 445. Google Scholar

[4]

J. Chen, X. Chen, R. J. Kauffman and X. Song, Should we collude? Analyzing the benefits of bidder cooperation in online group-buying auctions,, Electronic Commerce Research and Applications, 8 (2009), 191. Google Scholar

[5]

J. Chen, R. J. Kauffman, Y. H. Liu and X. Song, Segmenting uncertain demand in group-buying auctions,, Electronic Commerce Research and Applications, 9 (2010), 126. Google Scholar

[6]

R. J. Dolan, Quantity discounts: Managerial issues and research opportunities,, Marketing Science, 6 (1987), 1. Google Scholar

[7]

J. Feng, Optimal mechanism for selling a set of commonly ranked objects,, Marketing Science, 27 (2008), 501. Google Scholar

[8]

X. Jing and J. Xie, Group buying: A new mechanism for selling through social interactions,, Management Science, 57 (2011), 1354. Google Scholar

[9]

R. J. Kauffman and B. Wang, New buyers' arrival under dynamic pricing market microstructure: The case of group-buying discounts on the Internet,, Journal of Management Information Systems, 18 (2002), 157. Google Scholar

[10]

R. J. Kauffman and B. Wang, Bid together, buy together: On the efficacy of group-buying business models in Internet-based selling,, in, (2002). Google Scholar

[11]

P. Klemperer, "Collusion and Predation in Auctin Markets,", Working paper, (2001). Google Scholar

[12]

A. M. Kwasnica, "A Theory of Collusion in Multiple Object Simultaneous Auctions,", Working paper, (2002). Google Scholar

[13]

R. P. McAfee and J. D. McMillan, Bidding rings,, The American Economic Review, 82 (1992), 579. Google Scholar

[14]

W. J. Mead, A. Moseidjord and P. E. Sorenson, Natural resource disposal policy: Oral auction versus sealed bids,, Natural Resources Journal, 7 (1967), 195. Google Scholar

[15]

M. Pesendorfer, A study of collusion in first-price auctions,, Review of Economic Studies, 67 (2000), 381. Google Scholar

[16]

M. S. Robinson, Collusion and the choice of auction,, The RAND Journal of Economics, 16 (1985), 141. Google Scholar

[17]

A. Segev, C. Beam and J. Shanthikumar, Optimal design of Internet-based auctions,, Information Technology and Management, 2 (2001), 121. Google Scholar

[1]

Feimin Zhong, Wei Zeng, Zhongbao Zhou. Mechanism design in a supply chain with ambiguity in private information. Journal of Industrial & Management Optimization, 2017, 13 (5) : 1-27. doi: 10.3934/jimo.2018151

[2]

Mitali Sarkar, Young Hae Lee. Optimum pricing strategy for complementary products with reservation price in a supply chain model. Journal of Industrial & Management Optimization, 2017, 13 (3) : 1553-1586. doi: 10.3934/jimo.2017007

[3]

Heman Shakeri, Faryad Darabi Sahneh, Caterina Scoglio, Pietro Poggi-Corradini, Victor M. Preciado. Optimal information dissemination strategy to promote preventive behaviors in multilayer epidemic networks. Mathematical Biosciences & Engineering, 2015, 12 (3) : 609-623. doi: 10.3934/mbe.2015.12.609

[4]

Yiju Wang, Wei Xing, Hengxia Gao. Optimal ordering policy for inventory mechanism with a stochastic short-term price discount. Journal of Industrial & Management Optimization, 2017, 13 (5) : 1-16. doi: 10.3934/jimo.2018199

[5]

Po-Chung Yang, Hui-Ming Wee, Shen-Lian Chung, Yong-Yan Huang. Pricing and replenishment strategy for a multi-market deteriorating product with time-varying and price-sensitive demand. Journal of Industrial & Management Optimization, 2013, 9 (4) : 769-787. doi: 10.3934/jimo.2013.9.769

[6]

Zhenwei Luo, Jinting Wang. The optimal price discount, order quantity and minimum quantity in newsvendor model with group purchase. Journal of Industrial & Management Optimization, 2015, 11 (1) : 1-11. doi: 10.3934/jimo.2015.11.1

[7]

Arsen R. Dzhanoev, Alexander Loskutov, Hongjun Cao, Miguel A.F. Sanjuán. A new mechanism of the chaos suppression. Discrete & Continuous Dynamical Systems - B, 2007, 7 (2) : 275-284. doi: 10.3934/dcdsb.2007.7.275

[8]

Quan Wang, Huichao Wang. The dynamical mechanism of jets for AGN. Discrete & Continuous Dynamical Systems - B, 2016, 21 (3) : 943-957. doi: 10.3934/dcdsb.2016.21.943

[9]

Jiahua Zhang, Shu-Cherng Fang, Yifan Xu, Ziteng Wang. A cooperative game with envy. Journal of Industrial & Management Optimization, 2017, 13 (4) : 2049-2066. doi: 10.3934/jimo.2017031

[10]

Pablo Álvarez-Caudevilla, Julián López-Gómez. The dynamics of a class of cooperative systems. Discrete & Continuous Dynamical Systems - A, 2010, 26 (2) : 397-415. doi: 10.3934/dcds.2010.26.397

[11]

Ka Wo Lau, Yue Kuen Kwok. Optimal execution strategy of liquidation. Journal of Industrial & Management Optimization, 2006, 2 (2) : 135-144. doi: 10.3934/jimo.2006.2.135

[12]

Kegui Chen, Xinyu Wang, Min Huang, Wai-Ki Ching. Compensation plan, pricing and production decisions with inventory-dependent salvage value, and asymmetric risk-averse sales agent. Journal of Industrial & Management Optimization, 2018, 14 (4) : 1397-1422. doi: 10.3934/jimo.2018013

[13]

Mohammad T. Manzari, Charles S. Peskin. Paradoxical waves and active mechanism in the cochlea. Discrete & Continuous Dynamical Systems - A, 2016, 36 (8) : 4531-4552. doi: 10.3934/dcds.2016.36.4531

[14]

Ludwig Arnold, Igor Chueshov. Cooperative random and stochastic differential equations. Discrete & Continuous Dynamical Systems - A, 2001, 7 (1) : 1-33. doi: 10.3934/dcds.2001.7.1

[15]

A. Marigo, Benedetto Piccoli. Cooperative controls for air traffic management. Communications on Pure & Applied Analysis, 2003, 2 (3) : 355-369. doi: 10.3934/cpaa.2003.2.355

[16]

Rui Wang, Denghua Zhong, Yuankun Zhang, Jia Yu, Mingchao Li. A multidimensional information model for managing construction information. Journal of Industrial & Management Optimization, 2015, 11 (4) : 1285-1300. doi: 10.3934/jimo.2015.11.1285

[17]

Miriam Kiessling, Sascha Kurz, Jörg Rambau. The integrated size and price optimization problem. Numerical Algebra, Control & Optimization, 2012, 2 (4) : 669-693. doi: 10.3934/naco.2012.2.669

[18]

Vikram Krishnamurthy, William Hoiles. Information diffusion in social sensing. Numerical Algebra, Control & Optimization, 2016, 6 (3) : 365-411. doi: 10.3934/naco.2016017

[19]

Subrata Dasgupta. Disentangling data, information and knowledge. Big Data & Information Analytics, 2016, 1 (4) : 377-389. doi: 10.3934/bdia.2016016

[20]

Apostolis Pavlou. Asymmetric information in a bilateral monopoly. Journal of Dynamics & Games, 2016, 3 (2) : 169-189. doi: 10.3934/jdg.2016009

2018 Impact Factor: 1.025

Metrics

  • PDF downloads (10)
  • HTML views (0)
  • Cited by (3)

Other articles
by authors

[Back to Top]