How Online-Enabled Environments Increase Prices -A Game Theory Approach for Experience Products

摘要

Price level decisions are critical for experience products retailers seeking to maximize the results of their operations online .We explore optimum price levels for thoseretailers who make use of both physical and virtual channels to market experience products. By means of a game theory model we capture successive purchase processes by consumers, and their impact on online-enabled retailers' decisions. We find that an online-enabled retailer might increase their price levels under certain strategic conditions.