业务
利润(经济学)
产业组织
为了利润
农业综合企业
营销
商业
微观经济学
经济
财务
农业
生态学
生物
作者
C. Gizem Korpeoglu,Ersin Körpeoğlu,Christopher S. Tang,Jiayi Joey Yu
出处
期刊:Social Science Research Network
[Social Science Electronic Publishing]
日期:2020-01-01
被引量:1
摘要
To serve the local interests, more socially-responsible retailers (e.g., food cooperatives) are entering the market with a social commitment: (1) donate a proportion of its profit to non-profit organizations that serve the local community; or (2) maximize its sales quantity to support local economy and create local jobs. How should these socially-responsible retailers determine their entry strategy in the presence of incumbent (for-profit) retailers, and how should those incumbent retailers respond?In this paper, we present a game-theoretic model to analyze the competition between an entrant (socially-responsible) retailer and an incumbent (for-profit) retailer in a market comprising heterogeneous consumers with different annual consumption rates and social benefit levels. We examine the socially-responsible retailer's pricing strategy and entry conditions, the impact of the socially-responsible retailer's entry on the incumbent retailer's profit, and the conditions under which the incumbent retailer should deter the socially-responsible retailer's entry. Our analytical results indicate that a socially-responsible retailer can afford to enter the market only when its fixed annual operating cost is below a certain threshold. Upon entry, it is optimal for social retailer to set a membership fee and a member-only discount to attract at least those consumers with high consumption rate. We also show that the socially-responsible retailer's entry is detrimental for the incumbent retailer. However, interestingly, even if the incumbent retailer can profitably deter the socially-responsible retailer's entry, it is actually optimal for the incumbent to tolerate it when the socially-responsible retailer's annual fixed operating cost is below a certain threshold. These structural results are robust to whether consumption rates are price-dependent.
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