Journal of Korean Institute of Industrial Engineers (대한산업공학회지)

Korean Institute of Industrial Engineers (대한산업공학회)
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Analysis of Pricing and Efficiency Control Strategy between Online and Offline Marketing Channels

Online 과 Offline 마케팅 채널 간의 가격경쟁 및 효율성 통제전략 분석

  • Cho, Hyung-Rae (Dept. of Industrial Systems Engineering, Gyeongsang National University) ;
  • Yu, Jung-Sub (Dept. of Industrial Systems Engineering, Gyeongsang National University) ;
  • Cha, Chun-Nam (Dept. of Industrial Systems Engineering, Gyeongsang National University) ;
  • Lim, Sang-Kyu (Dept. of Industrial Systems Engineering, Gyeongsang National University)
  • 조형래 (경상대학교 공과대학 산업시스템공학부) ;
  • 류정섭 (경상대학교 공과대학 산업시스템공학부) ;
  • 차춘남 (경상대학교 공과대학 산업시스템공학부) ;
  • 임상규 (경상대학교 공과대학 산업시스템공학부)
  • Received : 20001200
  • Accepted : 20010300
  • Published : 2001.06.30
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Abstract

The proliferation of the Internet and related technologies and applications has led to a new form of market place known as the electronic store. In this paper, we study competition between two shopping channels, an electronic store and traditional retailers. Based on the circular spatial market model, we derive the Nash and Stackelberg equilibria as a function of the efficiency of the electronic store. The result shows that the Stackelberg equilibrium is always superior to the Nash equilibrium for both channels. It is also shown that, in some cases, the electronic store has incentive to decrease its efficiency to gain more profit.

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