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RETRACTED ARTICLE: The optimal pricing strategy to evaluate the reputations of sellers in online platforms using the game theory model

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This article was retracted on 13 February 2024

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Abstract

Most online markets establish reputation systems to assist in building trust between sellers and buyers. Sellers’ reputations not only provide guidelines for buyers but may also inform sellers of their optimal pricing strategy. In this research, we assumed two types of buyers – informed buyers and uninformed buyers. Informed buyers know more about the reputation of the seller but may incur a search cost. Then we developed a benchmark model and a competition model. We found that high reputation sellers and low reputation sellers adopt different pricing strategies depending on the informativeness of buyers and the competition among sellers. With a large proportion of well-informed buyers, high reputation sellers may charge a lower price than low reputation sellers, i.e., a negative price premium effect, in contrast to conclusions of some previous studies. Empirical findings were consistent with our theoretical models. We collected data on five categories of products, televisions, laptops, cosmetics, shoes, and beverages, from Taobao – a leading e-commerce market. A negative price premium effect was observed for TVs, laptops, and cosmetics; a price premium effect was observed for beverages; no significant trend was observed for shoes. We infer product value and market complexity are the main factors of buyer informativeness.

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The authors did not receive specific funding.

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Authors and Affiliations

  1. International Business School Suzhou, Xi-an Jiaotong Liverpool University, Suzhou, 215123, Jiangsu, China

    Zehao Chen

  2. School of Chemistry, The University of Edinburgh, Edinburgh, Scotland, EH8 9YL, United Kingdom

    Yanchen Zhu

  3. Mathematical Institute, University of Oxford, Oxford, OX2 6GG, United Kingdom

    Tianyang Shen

  4. Foreign Languages School, Zhejiang University, Hangzhou, 310012, Zhejiang, China

    Yufan Ye

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  1. Zehao Chen
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  2. Yanchen Zhu
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  3. Tianyang Shen
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  4. Yufan Ye
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Correspondence to Zehao Chen.

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This article has been retracted. Please see the retraction notice for more detail:https://doi.org/10.1007/s12063-024-00463-7

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Chen, Z., Zhu, Y., Shen, T. et al. RETRACTED ARTICLE: The optimal pricing strategy to evaluate the reputations of sellers in online platforms using the game theory model. Oper Manag Res 15, 953–964 (2022). https://doi.org/10.1007/s12063-022-00306-3

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  • DOI: https://doi.org/10.1007/s12063-022-00306-3

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